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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 are the 2 types of cash outflows?
Fixed - variable
Fixed you know whats being payed each month
Cash flow - keeping records - plan (budget)
Inability to pay debts when they're due

2. What is a balance sheet also called?
Needs - goals - personal situation
Net worth statement
Cash and items that are easily converted to cash
Handling daily business - bills payed on time - taxes - investments

3. Net worth?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Indicates the difference between your total assets total liabilities at any given date.
Fixed you know whats being payed each month
Record income - record cash outflows - determine net cash flows

4. What are the benefits of having an organized system for financial records?
Fixed you know whats being payed each month
Handling daily business - bills payed on time - taxes - investments
Daily spending - saving decisions
Paper that you give to your employer telling them how much money to take out of your taxes

5. What types of records would be stored on a home computer?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
6 years
Budget - summary of checks - Convenience
Paper that you give to your employer telling them how much money to take out of your taxes

6. What 2 ways can a person be paid?
Day to day financial activities used to manage personal financial stuff and security
Cash or check
Sell your assets - get another job
Assets - liabilities = net worth

7. What 3 things are spending decisions based upon?
Record income - record cash outflows - determine net cash flows
Cash and items that are easily converted to cash
Needs - goals - personal situation
Assessing (goals) - Planning (budget)

8. What is a cash flow statement?
Personal income and expenditure statement
Record income - record cash outflows - determine net cash flows
Cash or check
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money

9. Cash flow can also be called?
Real estate - personal possessions - investment assets
Sell your assets - get another job
Personal income and expenditure statement
The amount of money you make before taxes or deductions

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
A sheet of your finances that helps you come to terms with your net worth
Assets - liabilities = net worth
What you owe

11. What is a liquid asset?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Money you make subtracted from how much you spend
Cash and items that are easily converted to cash
Budget - summary of checks - Convenience

12. How long should you keep tax return forms?
Assets - liabilities = net worth
Personal employment records - tax records
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
6 years

13. Insolvency?

14. What 3 components are listed on a personal balance sheet?
Fixed you know whats being payed each month
Assets - liabilities - net worth
The amount of money you make before taxes or deductions
Investments - wages - interest

15. What is gross pay?
The amount of money you make before taxes or deductions
Fixed you know whats being payed each month
Cash and items that are easily converted to cash
Current (less 1 year) credit card bill - long term (more than a year) mortgage

16. How is a net can flow determined?
Cash or check
Money you make subtracted from how much you spend
Record income - record cash outflows - determine net cash flows
Forever

17. What are the steps in the budgeting process?
Real estate - personal possessions - investment assets
Forever
Assessing (goals) - Planning (budget)
Needs - goals - personal situation

18. 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
Assessing (goals) - Planning (budget)
Personal income and expenditure statement

19. How can net worth be increased?
Indicates the difference between your total assets total liabilities at any given date.
Assets - liabilities - net worth
Fixed you know whats being payed each month
Sell your assets - get another job

20. What are 3 types of personal financial statements?
Fixed - variable
Sell your assets - get another job
Balance sheet - cash flow statement - budget
Indicates the difference between your total assets total liabilities at any given date.

21. How is net worth calculated?
Assets - liabilities = net worth
Forever
Fixed - variable
Personal income and expenditure statement

22. What is the difference between a fixed and variable expense?
Needs - goals - personal situation
Fixed - variable
Cash flow - keeping records - plan (budget)
Fixed you know whats being payed each month

23. What types of records go in a safety deposit box?
Needs - goals - personal situation
Personal employment records - tax records
Assessing (goals) - Planning (budget)
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

24. What types of records go in a home file?
Personal employment records - tax records
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
FOREVER
Assets - liabilities = net worth

25. How long should you keep records on personal property and investments?
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
How ever long you need it!
Personal income and expenditure statement

26. What are some sources of income?
Investments - wages - interest
Day to day financial activities used to manage personal financial stuff and security
Personal income and expenditure statement
Assessing (goals) - Planning (budget)

27. How long should you keep records on real estate?
Assets - liabilities = net worth
Forever
Inability to pay debts when they're due
Personal income and expenditure statement

28. What is at the heart of financial planning?
Daily spending - saving decisions
Cash and items that are easily converted to cash
Balance sheet - cash flow statement - budget
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?
Record income - record cash outflows - determine net cash flows
Investments - wages - interest
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Cash and items that are easily converted to cash

30. Liabilities?
Personal employment records - tax records
What you owe
6 years
What you own

31. What are various types of liabilities?
Sell your assets - get another job
Cash or check
What you owe
Current (less 1 year) credit card bill - long term (more than a year) mortgage

32. What is money management?
Sell your assets - get another job
Day to day financial activities used to manage personal financial stuff and security
Inability to pay debts when they're due
Personal income and expenditure statement

33. How long should you keep birth certificates - social security cards - etc?
FOREVER
Needs - goals - personal situation
Money you make subtracted from how much you spend
Record income - record cash outflows - determine net cash flows

34. What are the various types of assets?
Real estate - personal possessions - investment assets
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Paper that you give to your employer telling them how much money to take out of your taxes
Forever

35. What is a personal balance sheet?
A sheet of your finances that helps you come to terms with your net worth
Daily spending - saving decisions
Personal employment records - tax records
6 years

36. What is a w-4?
Paper that you give to your employer telling them how much money to take out of your taxes
Day to day financial activities used to manage personal financial stuff and security
Cash or check
How ever long you need it!

37. What are the 3 components of money management?
Fixed - variable
Cash flow - keeping records - plan (budget)
Record income - record cash outflows - determine net cash flows
Sell your assets - get another job

38. Assets?
Cash flow - keeping records - plan (budget)
Paper that you give to your employer telling them how much money to take out of your taxes
Cash or check
What you own