Test your basic knowledge |

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 are 3 types of personal financial statements?
Balance sheet - cash flow statement - budget
Personal employment records - tax records
Real estate - personal possessions - investment assets
Paper that you give to your employer telling them how much money to take out of your taxes

2. How long should you keep records on real estate?
Forever
Needs - goals - personal situation
Real estate - personal possessions - investment assets
Assets - liabilities = net worth

3. How long should you keep tax return forms?
Record income - record cash outflows - determine net cash flows
6 years
Cash and items that are easily converted to cash
Inability to pay debts when they're due

4. What is money management?
Day to day financial activities used to manage personal financial stuff and security
6 years
Budget - summary of checks - Convenience
Assessing (goals) - Planning (budget)

5. What are some sources of income?
Investments - wages - interest
Net worth statement
Cash flow - keeping records - plan (budget)
Sell your assets - get another job

6. Net worth?
Indicates the difference between your total assets total liabilities at any given date.
Personal income and expenditure statement
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Balance sheet - cash flow statement - budget

7. What is the purpose of personal financial statements?
Assets - liabilities - net worth
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
FOREVER

8. Assets?
Assessing (goals) - Planning (budget)
What you own
Assets - liabilities = net worth
Investments - wages - interest

9. What is a balance sheet also called?
Net worth statement
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
FOREVER
Assets - liabilities = net worth

10. What 3 components are listed on a personal balance sheet?
Cash or check
Indicates the difference between your total assets total liabilities at any given date.
Assets - liabilities - net worth
Daily spending - saving decisions

11. How is net worth calculated?
Day to day financial activities used to manage personal financial stuff and security
Assets - liabilities = net worth
6 years
How ever long you need it!

12. What is a liquid asset?
Money you make subtracted from how much you spend
Real estate - personal possessions - investment assets
A sheet of your finances that helps you come to terms with your net worth
Cash and items that are easily converted to cash

13. What are various types of liabilities?
Assets - liabilities = net worth
The amount of money you make before taxes or deductions
Cash flow - keeping records - plan (budget)
Current (less 1 year) credit card bill - long term (more than a year) mortgage

14. What are the 2 types of cash outflows?
Fixed - variable
Record income - record cash outflows - determine net cash flows
What you own
Cash or check

15. What is a cash flow statement?
Assets - liabilities = net worth
Fixed you know whats being payed each month
Cash or check
Personal income and expenditure statement

16. What is gross pay?
The amount of money you make before taxes or deductions
Assets - liabilities - net worth
Personal income and expenditure statement
Budget - summary of checks - Convenience

17. What is a w-4?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Personal income and expenditure statement
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

18. What is a personal balance sheet?
Money you make subtracted from how much you spend
A sheet of your finances that helps you come to terms with your net worth
How ever long you need it!
Forever

19. What are the various types of assets?
Assets - liabilities = net worth
Indicates the difference between your total assets total liabilities at any given date.
Handling daily business - bills payed on time - taxes - investments
Real estate - personal possessions - investment assets

20. What types of records go in a safety deposit box?
Cash and items that are easily converted to cash
A sheet of your finances that helps you come to terms with your net worth
Day to day financial activities used to manage personal financial stuff and security
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

21. How long should you keep birth certificates - social security cards - etc?
What you owe
Current (less 1 year) credit card bill - long term (more than a year) mortgage
FOREVER
Assets - liabilities = net worth

22. What are the 3 components of money management?
Fixed you know whats being payed each month
Inability to pay debts when they're due
What you owe
Cash flow - keeping records - plan (budget)

23. Liabilities?
Paper that you give to your employer telling them how much money to take out of your taxes
Budget - summary of checks - Convenience
What you owe
What you own

24. What are some oppertunity cost associated with money management?
Balance sheet - cash flow statement - budget
Assets - liabilities = net worth
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
How ever long you need it!

25. What is the difference between a fixed and variable expense?
Fixed you know whats being payed each month
Sell your assets - get another job
What you owe
Handling daily business - bills payed on time - taxes - investments

26. What types of records would be stored on a home computer?
Net worth statement
Forever
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Budget - summary of checks - Convenience

27. What types of records go in a home file?
Assets - liabilities - net worth
A sheet of your finances that helps you come to terms with your net worth
Personal employment records - tax records
Real estate - personal possessions - investment assets

28. What 3 things are spending decisions based upon?
How ever long you need it!
Indicates the difference between your total assets total liabilities at any given date.
Personal employment records - tax records
Needs - goals - personal situation

29. Insolvency?

30. What is at the heart of financial planning?
Forever
What you owe
Fixed you know whats being payed each month
Daily spending - saving decisions

31. What are the 3 components of a cash flow statement?
Daily spending - saving decisions
Assessing (goals) - Planning (budget)
Record income - record cash outflows - determine net cash flows
Budget - summary of checks - Convenience

32. How long should you keep records on personal property and investments?
How ever long you need it!
Paper that you give to your employer telling them how much money to take out of your taxes
FOREVER
Handling daily business - bills payed on time - taxes - investments

33. How is a net can flow determined?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Cash flow - keeping records - plan (budget)
Budget - summary of checks - Convenience
Money you make subtracted from how much you spend

34. How can net worth be increased?
Personal employment records - tax records
Sell your assets - get another job
FOREVER
Cash and items that are easily converted to cash

35. Cash flow can also be called?
Personal employment records - tax records
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Assessing (goals) - Planning (budget)
Personal income and expenditure statement

36. What 2 ways can a person be paid?
Forever
Cash or check
A sheet of your finances that helps you come to terms with your net worth
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money

37. What are the benefits of having an organized system for financial records?
Handling daily business - bills payed on time - taxes - investments
A sheet of your finances that helps you come to terms with your net worth
Net worth statement
Forever

38. What are the steps in the budgeting process?
Assessing (goals) - Planning (budget)
Handling daily business - bills payed on time - taxes - investments
The amount of money you make before taxes or deductions
Assets - liabilities = net worth