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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 the purpose of personal financial statements?
Inability to pay debts when they're due
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Cash or check
Assets - liabilities - net worth

2. What is money management?
The amount of money you make before taxes or deductions
Record income - record cash outflows - determine net cash flows
FOREVER
Day to day financial activities used to manage personal financial stuff and security

3. What are various types of liabilities?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Cash and items that are easily converted to cash
Cash flow - keeping records - plan (budget)

4. What are some oppertunity cost associated with money management?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Fixed you know whats being payed each month
Record income - record cash outflows - determine net cash flows
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money

5. Liabilities?
What you owe
Real estate - personal possessions - investment assets
Balance sheet - cash flow statement - budget
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

6. What are the 3 components of money management?
Net worth statement
6 years
Cash flow - keeping records - plan (budget)
Inability to pay debts when they're due

7. Cash flow can also be called?
FOREVER
What you own
Personal income and expenditure statement
Personal employment records - tax records

8. How can net worth be increased?
Sell your assets - get another job
How ever long you need it!
Paper that you give to your employer telling them how much money to take out of your taxes
Personal employment records - tax records

9. What are the 3 components of a cash flow statement?
Forever
A sheet of your finances that helps you come to terms with your net worth
Record income - record cash outflows - determine net cash flows
Cash flow - keeping records - plan (budget)

10. How long should you keep records on personal property and investments?
How ever long you need it!
Assets - liabilities = net worth
A sheet of your finances that helps you come to terms with your net worth
Handling daily business - bills payed on time - taxes - investments

11. What is a w-4?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Paper that you give to your employer telling them how much money to take out of your taxes
Personal income and expenditure statement
Record income - record cash outflows - determine net cash flows

12. What types of records would be stored on a home computer?
Inability to pay debts when they're due
Balance sheet - cash flow statement - budget
Forever
Budget - summary of checks - Convenience

13. What are the various types of assets?
Real estate - personal possessions - investment assets
Inability to pay debts when they're due
How ever long you need it!
Cash or check

14. What is at the heart of financial planning?
Cash flow - keeping records - plan (budget)
Budget - summary of checks - Convenience
Daily spending - saving decisions
Paper that you give to your employer telling them how much money to take out of your taxes

15. What are some sources of income?
Handling daily business - bills payed on time - taxes - investments
Investments - wages - interest
Forever
FOREVER

16. What is a liquid asset?
Money you make subtracted from how much you spend
Indicates the difference between your total assets total liabilities at any given date.
Cash and items that are easily converted to cash
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

17. What are the 2 types of cash outflows?
Money you make subtracted from how much you spend
What you owe
Fixed - variable
Record income - record cash outflows - determine net cash flows

18. How long should you keep birth certificates - social security cards - etc?
Assets - liabilities = net worth
Personal income and expenditure statement
FOREVER
Net worth statement

19. What 3 components are listed on a personal balance sheet?
What you own
Assessing (goals) - Planning (budget)
Money you make subtracted from how much you spend
Assets - liabilities - net worth

20. Net worth?
Indicates the difference between your total assets total liabilities at any given date.
Fixed - variable
Handling daily business - bills payed on time - taxes - investments
Personal income and expenditure statement

21. What is a personal balance sheet?
A sheet of your finances that helps you come to terms with your net worth
How ever long you need it!
Inability to pay debts when they're due
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

22. What are the steps in the budgeting process?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Assessing (goals) - Planning (budget)
What you own
Cash or check

23. How long should you keep tax return forms?
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Record income - record cash outflows - determine net cash flows
6 years
What you own

24. What are 3 types of personal financial statements?
Needs - goals - personal situation
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Balance sheet - cash flow statement - budget
Assets - liabilities = net worth

25. What is a cash flow statement?
Investments - wages - interest
Fixed you know whats being payed each month
Personal income and expenditure statement
What you owe

26. What types of records go in a home file?
Fixed - variable
Personal employment records - tax records
Budget - summary of checks - Convenience
Balance sheet - cash flow statement - budget

27. What are the benefits of having an organized system for financial records?
FOREVER
Sell your assets - get another job
Handling daily business - bills payed on time - taxes - investments
Budget - summary of checks - Convenience

28. What is a balance sheet also called?
Net worth statement
Cash or check
Personal income and expenditure statement
Indicates the difference between your total assets total liabilities at any given date.

29. Insolvency?

30. Assets?
What you own
Cash flow - keeping records - plan (budget)
A sheet of your finances that helps you come to terms with your net worth
How ever long you need it!

31. How long should you keep records on real estate?
Day to day financial activities used to manage personal financial stuff and security
Handling daily business - bills payed on time - taxes - investments
Forever
6 years

32. What is the difference between a fixed and variable expense?
Fixed you know whats being payed each month
Sell your assets - get another job
Day to day financial activities used to manage personal financial stuff and security
What you own

33. What 2 ways can a person be paid?
Inability to pay debts when they're due
Daily spending - saving decisions
Day to day financial activities used to manage personal financial stuff and security
Cash or check

34. How is net worth calculated?
Assets - liabilities = net worth
Needs - goals - personal situation
Budget - summary of checks - Convenience
Fixed - variable

35. What is gross pay?
What you own
Budget - summary of checks - Convenience
The amount of money you make before taxes or deductions
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money

36. What types of records go in a safety deposit box?
A sheet of your finances that helps you come to terms with your net worth
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Inability to pay debts when they're due

37. How is a net can flow determined?
Record income - record cash outflows - determine net cash flows
Money you make subtracted from how much you spend
What you owe
Forever

38. What 3 things are spending decisions based upon?
Assets - liabilities = net worth
Needs - goals - personal situation
FOREVER
What you own