The major function of personal financial planning is to

Achieve personal economic satisfaction

A home file should be used to keep

Financial records for current needs.

How long should you keep documents relating to investments?

As long as you own these items.

Money management refers to

Day-to-day financial activities.

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Chapter 2 Personal Finance Bollinger

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Questions 15

Answers

1
The major function of personal financial planning is to
Reduce taxes
Increase savings
Achieve personal economic satisfaction
Improve your credit rating
2
If you budgeted $1,200 for utilites in July. But actually spent $1,160. Your budget variance is
$60 deficit
$40 deficit
$1,160 deficit
$40 surplus
3
A home file should be used to keep
All financial documents and records.
Obsolete financial documents.
Financial records for current needs.
Documents that require maximum security.
4
Which of the following ratios shows the relationship between debt and net worth?
Household ratio
Debt payments ratio
Current ratio
Debt ratio
5
In an organized system of financial records, medical information belongs in a home file.
False
True
6
A family with $100,000 in assets and $60,000 of liabilities would have a net worth of
$100,000.
$20,000.
$40,000.
$60,000.
7
Items with monetary value are referred to as
Income.
Assets.
Liabilities.
Net worth.
8
A budget is a record of how a person or family has spent their money.
True
False
9
The main purposes of personal financial statements are to
Measure your progress toward financial goals.
All of the above are correct
Report your current financial position.
Maintain information about your financial activities.
10
An organized system of financial records provides a basis for reducing credit card usage.
False
True
11
A personal balance sheet reports
Items owned and amounts owed
Earnings on savings and investments.
Family financial goals.
Amounts budgeted for spending.
12
A document that would be most useful to plan spending and saving to achieve financial goals is
Bank statement.
Budget.
Cash flow statement.
Balance sheet.
13
How long should you keep documents relating to investments?
Permanently.
Seven years.
As long as you own these items.
No need to since the broker probably has a copy.
14
Net worth is the amount owed to others.
True
False
15
Money management refers to
Trade-offs that occur with financial decisions.
Storing financial records for easy access.
Preparing personal financial statements.
Day-to-day financial activities.

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