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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 liquid asset?
Cash and items that are easily converted to cash
What you own
Inability to pay debts when they're due
Handling daily business - bills payed on time - taxes - investments

2. What is the purpose of personal financial statements?
Personal income and expenditure statement
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Indicates the difference between your total assets total liabilities at any given date.
Record income - record cash outflows - determine net cash flows

3. How can net worth be increased?
Sell your assets - get another job
Net worth statement
Assessing (goals) - Planning (budget)
Paper that you give to your employer telling them how much money to take out of your taxes

4. Insolvency?

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5. What types of records would be stored on a home computer?
What you own
Assets - liabilities - net worth
A sheet of your finances that helps you come to terms with your net worth
Budget - summary of checks - Convenience

6. What are 3 types of personal financial statements?
Assets - liabilities - net worth
Assessing (goals) - Planning (budget)
Paper that you give to your employer telling them how much money to take out of your taxes
Balance sheet - cash flow statement - budget

7. How long should you keep records on real estate?
Money you make subtracted from how much you spend
Needs - goals - personal situation
Record income - record cash outflows - determine net cash flows
Forever

8. How long should you keep tax return forms?
Forever
Paper that you give to your employer telling them how much money to take out of your taxes
6 years
Cash or check

9. What are the 3 components of money management?
Cash flow - keeping records - plan (budget)
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
FOREVER
Forever

10. What is a w-4?
Paper that you give to your employer telling them how much money to take out of your taxes
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Inability to pay debts when they're due
Personal income and expenditure statement

11. What are the various types of assets?
Personal income and expenditure statement
Handling daily business - bills payed on time - taxes - investments
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Real estate - personal possessions - investment assets

12. Cash flow can also be called?
Paper that you give to your employer telling them how much money to take out of your taxes
The amount of money you make before taxes or deductions
Cash or check
Personal income and expenditure statement

13. What 3 things are spending decisions based upon?
Daily spending - saving decisions
Real estate - personal possessions - investment assets
Money you make subtracted from how much you spend
Needs - goals - personal situation

14. What is gross pay?
Cash flow - keeping records - plan (budget)
The amount of money you make before taxes or deductions
Investments - wages - interest
Current (less 1 year) credit card bill - long term (more than a year) mortgage

15. What is a balance sheet also called?
Cash flow - keeping records - plan (budget)
Balance sheet - cash flow statement - budget
Inability to pay debts when they're due
Net worth statement

16. What are various types of liabilities?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Budget - summary of checks - Convenience
Balance sheet - cash flow statement - budget
Cash or check

17. How long should you keep birth certificates - social security cards - etc?
Real estate - personal possessions - investment assets
Fixed you know whats being payed each month
FOREVER
Fixed - variable

18. How is net worth calculated?
Cash or check
Assets - liabilities = net worth
Paper that you give to your employer telling them how much money to take out of your taxes
Current (less 1 year) credit card bill - long term (more than a year) mortgage

19. How is a net can flow determined?
Indicates the difference between your total assets total liabilities at any given date.
Money you make subtracted from how much you spend
Day to day financial activities used to manage personal financial stuff and security
Investments - wages - interest

20. What 3 components are listed on a personal balance sheet?
Assets - liabilities - net worth
Personal income and expenditure statement
Indicates the difference between your total assets total liabilities at any given date.
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

21. What is the difference between a fixed and variable expense?
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
Handling daily business - bills payed on time - taxes - investments
Fixed you know whats being payed each month

22. Assets?
Sell your assets - get another job
Assessing (goals) - Planning (budget)
What you own
Paper that you give to your employer telling them how much money to take out of your taxes

23. What types of records go in a home file?
Personal income and expenditure statement
Personal employment records - tax records
What you own
Indicates the difference between your total assets total liabilities at any given date.

24. What are some oppertunity cost associated with money management?
Personal income and expenditure statement
Cash flow - keeping records - plan (budget)
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Assessing (goals) - Planning (budget)

25. What is a cash flow statement?
Personal income and expenditure statement
Inability to pay debts when they're due
Personal employment records - tax records
Paper that you give to your employer telling them how much money to take out of your taxes

26. What are the benefits of having an organized system for financial records?
Budget - summary of checks - Convenience
A sheet of your finances that helps you come to terms with your net worth
Handling daily business - bills payed on time - taxes - investments
Daily spending - saving decisions

27. What is a personal balance sheet?
Investments - wages - interest
A sheet of your finances that helps you come to terms with your net worth
Record income - record cash outflows - determine net cash flows
Real estate - personal possessions - investment assets

28. What are the steps in the budgeting process?
Assessing (goals) - Planning (budget)
Budget - summary of checks - Convenience
6 years
Paper that you give to your employer telling them how much money to take out of your taxes

29. What are the 3 components of a cash flow statement?
Sell your assets - get another job
Daily spending - saving decisions
Assets - liabilities - net worth
Record income - record cash outflows - determine net cash flows

30. What are the 2 types of cash outflows?
Personal employment records - tax records
Fixed - variable
What you owe
Forever

31. Net worth?
Assets - liabilities = net worth
Fixed - variable
Assessing (goals) - Planning (budget)
Indicates the difference between your total assets total liabilities at any given date.

32. What are some sources of income?
Handling daily business - bills payed on time - taxes - investments
Investments - wages - interest
Assets - liabilities = net worth
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

33. Liabilities?
Record income - record cash outflows - determine net cash flows
Balance sheet - cash flow statement - budget
Money you make subtracted from how much you spend
What you owe

34. How long should you keep records on personal property and investments?
How ever long you need it!
Needs - goals - personal situation
Indicates the difference between your total assets total liabilities at any given date.
Real estate - personal possessions - investment assets

35. What 2 ways can a person be paid?
A sheet of your finances that helps you come to terms with your net worth
Personal income and expenditure statement
Cash or check
Assets - liabilities - net worth

36. What is money management?
Day to day financial activities used to manage personal financial stuff and security
6 years
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Assessing (goals) - Planning (budget)

37. What is at the heart of financial planning?
Daily spending - saving decisions
What you own
6 years
Forever

38. What types of records go in a safety deposit box?
The amount of money you make before taxes or deductions
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
What you own
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money