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Financial Statements And Budgeting

Instructions:

Answer 38 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. What is a w-4?
Investments - wages - interest
Cash and items that are easily converted to cash
Paper that you give to your employer telling them how much money to take out of your taxes
Forever

2. How long should you keep birth certificates - social security cards - etc?
A sheet of your finances that helps you come to terms with your net worth
FOREVER
Money you make subtracted from how much you spend
What you owe

3. What types of records go in a home file?
Personal income and expenditure statement
Needs - goals - personal situation
Personal employment records - tax records
Budget - summary of checks - Convenience

4. What are the 2 types of cash outflows?
Fixed - variable
Day to day financial activities used to manage personal financial stuff and security
Balance sheet - cash flow statement - budget
Forever

5. What is a liquid asset?
Cash and items that are easily converted to cash
The amount of money you make before taxes or deductions
Personal employment records - tax records
Real estate - personal possessions - investment assets

6. What are the various types of assets?
Real estate - personal possessions - investment assets
Fixed you know whats being payed each month
What you own
Paper that you give to your employer telling them how much money to take out of your taxes

7. What is a balance sheet also called?
Assets - liabilities = net worth
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Net worth statement
Assessing (goals) - Planning (budget)

8. What are some sources of income?
Real estate - personal possessions - investment assets
Investments - wages - interest
Money you make subtracted from how much you spend
Forever

9. Liabilities?
Assessing (goals) - Planning (budget)
What you owe
Money you make subtracted from how much you spend
Cash and items that are easily converted to cash

10. What are some oppertunity cost associated with money management?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Investments - wages - interest
Assets - liabilities - net worth

11. What are the 3 components of money management?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Cash flow - keeping records - plan (budget)
Inability to pay debts when they're due
Investments - wages - interest

12. How long should you keep records on real estate?
Forever
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Fixed - variable
Money you make subtracted from how much you spend

13. How long should you keep records on personal property and investments?
Paper that you give to your employer telling them how much money to take out of your taxes
What you own
How ever long you need it!
6 years

14. What is money management?
What you owe
Day to day financial activities used to manage personal financial stuff and security
Cash and items that are easily converted to cash
Sell your assets - get another job

15. What is a personal balance sheet?
A sheet of your finances that helps you come to terms with your net worth
Record income - record cash outflows - determine net cash flows
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Sell your assets - get another job

16. What 3 components are listed on a personal balance sheet?
Budget - summary of checks - Convenience
Personal employment records - tax records
Cash and items that are easily converted to cash
Assets - liabilities - net worth

17. What are the steps in the budgeting process?
Assessing (goals) - Planning (budget)
Investments - wages - interest
Indicates the difference between your total assets total liabilities at any given date.
A sheet of your finances that helps you come to terms with your net worth

18. How long should you keep tax return forms?
FOREVER
Record income - record cash outflows - determine net cash flows
6 years
Balance sheet - cash flow statement - budget

19. What are the benefits of having an organized system for financial records?
Cash flow - keeping records - plan (budget)
Handling daily business - bills payed on time - taxes - investments
Assessing (goals) - Planning (budget)
Assets - liabilities - net worth

20. Insolvency?

21. What types of records go in a safety deposit box?
Cash and items that are easily converted to cash
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Inability to pay debts when they're due
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

22. What is the purpose of personal financial statements?
Daily spending - saving decisions
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Cash flow - keeping records - plan (budget)

23. What are various types of liabilities?
Cash flow - keeping records - plan (budget)
Record income - record cash outflows - determine net cash flows
Current (less 1 year) credit card bill - long term (more than a year) mortgage
A sheet of your finances that helps you come to terms with your net worth

24. How can net worth be increased?
Daily spending - saving decisions
Day to day financial activities used to manage personal financial stuff and security
Sell your assets - get another job
FOREVER

25. How is net worth calculated?
Assets - liabilities = net worth
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Cash or check
Record income - record cash outflows - determine net cash flows

26. What 3 things are spending decisions based upon?
Personal employment records - tax records
Record income - record cash outflows - determine net cash flows
What you own
Needs - goals - personal situation

27. How is a net can flow determined?
Personal income and expenditure statement
Forever
Money you make subtracted from how much you spend
Assets - liabilities - net worth

28. What is a cash flow statement?
Paper that you give to your employer telling them how much money to take out of your taxes
Personal income and expenditure statement
What you owe
Net worth statement

29. What is the difference between a fixed and variable expense?
Daily spending - saving decisions
FOREVER
Investments - wages - interest
Fixed you know whats being payed each month

30. What is at the heart of financial planning?
Day to day financial activities used to manage personal financial stuff and security
Daily spending - saving decisions
Assessing (goals) - Planning (budget)
FOREVER

31. What is gross pay?
FOREVER
How ever long you need it!
What you own
The amount of money you make before taxes or deductions

32. What are 3 types of personal financial statements?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Balance sheet - cash flow statement - budget
Real estate - personal possessions - investment assets
Money you make subtracted from how much you spend

33. Cash flow can also be called?
Indicates the difference between your total assets total liabilities at any given date.
Paper that you give to your employer telling them how much money to take out of your taxes
Fixed you know whats being payed each month
Personal income and expenditure statement

34. What 2 ways can a person be paid?
Assets - liabilities = net worth
How ever long you need it!
Cash or check
Day to day financial activities used to manage personal financial stuff and security

35. Assets?
Day to day financial activities used to manage personal financial stuff and security
What you own
Real estate - personal possessions - investment assets
Paper that you give to your employer telling them how much money to take out of your taxes

36. Net worth?
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Day to day financial activities used to manage personal financial stuff and security
Indicates the difference between your total assets total liabilities at any given date.
Fixed you know whats being payed each month

37. What are the 3 components of a cash flow statement?
FOREVER
Record income - record cash outflows - determine net cash flows
A sheet of your finances that helps you come to terms with your net worth
Paper that you give to your employer telling them how much money to take out of your taxes

38. What types of records would be stored on a home computer?
Budget - summary of checks - Convenience
Daily spending - saving decisions
Assets - liabilities - net worth
Balance sheet - cash flow statement - budget