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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 types of records would be stored on a home computer?
Budget - summary of checks - Convenience
Indicates the difference between your total assets total liabilities at any given date.
How ever long you need it!
Personal employment records - tax records

2. What is a personal balance sheet?
What you owe
Fixed you know whats being payed each month
A sheet of your finances that helps you come to terms with your net worth
Personal income and expenditure statement

3. How is net worth calculated?
Needs - goals - personal situation
Assets - liabilities = net worth
What you own
Personal income and expenditure statement

4. What are some sources of income?
Investments - wages - interest
What you owe
Net worth statement
Cash flow - keeping records - plan (budget)

5. How can net worth be increased?
Real estate - personal possessions - investment assets
FOREVER
Sell your assets - get another job
Cash flow - keeping records - plan (budget)

6. How long should you keep birth certificates - social security cards - etc?
FOREVER
Investments - wages - interest
Budget - summary of checks - Convenience
Cash flow - keeping records - plan (budget)

7. How long should you keep records on real estate?
Cash and items that are easily converted to cash
Handling daily business - bills payed on time - taxes - investments
Real estate - personal possessions - investment assets
Forever

8. What are 3 types of personal financial statements?
Cash and items that are easily converted to cash
How ever long you need it!
Balance sheet - cash flow statement - budget
A sheet of your finances that helps you come to terms with your net worth

9. What is gross pay?
6 years
Daily spending - saving decisions
The amount of money you make before taxes or deductions
What you own

10. What are the 3 components of a cash flow statement?
Record income - record cash outflows - determine net cash flows
Personal income and expenditure statement
Paper that you give to your employer telling them how much money to take out of your taxes
Assets - liabilities = net worth

11. Assets?
What you own
Inability to pay debts when they're due
Paper that you give to your employer telling them how much money to take out of your taxes
Budget - summary of checks - Convenience

12. What are the 2 types of cash outflows?
Indicates the difference between your total assets total liabilities at any given date.
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Fixed - variable
Handling daily business - bills payed on time - taxes - investments

13. Liabilities?
Cash and items that are easily converted to cash
What you owe
Cash or check
How ever long you need it!

14. What 3 things are spending decisions based upon?
Handling daily business - bills payed on time - taxes - investments
Money you make subtracted from how much you spend
Needs - goals - personal situation
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

15. How long should you keep tax return forms?
Personal employment records - tax records
FOREVER
Fixed you know whats being payed each month
6 years

16. What are various types of liabilities?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Personal income and expenditure statement
A sheet of your finances that helps you come to terms with your net worth

17. What is the purpose of personal financial statements?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Net worth statement
How ever long you need it!
Fixed - variable

18. How long should you keep records on personal property and investments?
How ever long you need it!
Cash and items that are easily converted to cash
What you owe
Current (less 1 year) credit card bill - long term (more than a year) mortgage

19. What is a w-4?
Daily spending - saving decisions
Sell your assets - get another job
Balance sheet - cash flow statement - budget
Paper that you give to your employer telling them how much money to take out of your taxes

20. Net worth?
A sheet of your finances that helps you come to terms with your net worth
The amount of money you make before taxes or deductions
Paper that you give to your employer telling them how much money to take out of your taxes
Indicates the difference between your total assets total liabilities at any given date.

21. What is a cash flow statement?
Indicates the difference between your total assets total liabilities at any given date.
What you own
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Personal income and expenditure statement

22. What 2 ways can a person be paid?
Inability to pay debts when they're due
Paper that you give to your employer telling them how much money to take out of your taxes
Forever
Cash or check

23. What is money management?
Fixed you know whats being payed each month
The amount of money you make before taxes or deductions
Day to day financial activities used to manage personal financial stuff and security
Cash flow - keeping records - plan (budget)

24. What types of records go in a home file?
Handling daily business - bills payed on time - taxes - investments
Daily spending - saving decisions
Personal employment records - tax records
Needs - goals - personal situation

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

26. What are the benefits of having an organized system for financial records?
Real estate - personal possessions - investment assets
Handling daily business - bills payed on time - taxes - investments
Investments - wages - interest
What you owe

27. What is a balance sheet also called?
Net worth statement
Fixed you know whats being payed each month
The amount of money you make before taxes or deductions
Daily spending - saving decisions

28. What is at the heart of financial planning?
Daily spending - saving decisions
Assets - liabilities = net worth
Record income - record cash outflows - determine net cash flows
Needs - goals - personal situation

29. What is the difference between a fixed and variable expense?
Day to day financial activities used to manage personal financial stuff and security
Fixed you know whats being payed each month
Forever
Indicates the difference between your total assets total liabilities at any given date.

30. What are the steps in the budgeting process?
Personal income and expenditure statement
Assessing (goals) - Planning (budget)
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.

31. Cash flow can also be called?
The amount of money you make before taxes or deductions
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Money you make subtracted from how much you spend
Personal income and expenditure statement

32. How is a net can flow determined?
Money you make subtracted from how much you spend
FOREVER
Handling daily business - bills payed on time - taxes - investments
Personal employment records - tax records

33. What is a liquid asset?
The amount of money you make before taxes or deductions
Cash and items that are easily converted to cash
Handling daily business - bills payed on time - taxes - investments
Current (less 1 year) credit card bill - long term (more than a year) mortgage

34. What 3 components are listed on a personal balance sheet?
Record income - record cash outflows - determine net cash flows
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Assets - liabilities - net worth
Assessing (goals) - Planning (budget)

35. What are some oppertunity cost associated with money management?
Record income - record cash outflows - determine net cash flows
Balance sheet - cash flow statement - budget
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

36. Insolvency?

37. What are the various types of assets?
Real estate - personal possessions - investment assets
Day to day financial activities used to manage personal financial stuff and security
Fixed you know whats being payed each month
Cash or check

38. What types of records go in a safety deposit box?
6 years
Investments - wages - interest
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