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PERSONAL FINANCE CHAPTER 3 Flashcards | StudBud
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PERSONAL FINANCE CHAPTER 3
PERSONAL FINANCE CHAPTER 3
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1
OPPORTUNITY COST REFER TO:
AVOIDING THE USE OF CONSUMER CREDIT
CURRENT SPENDING HABITS
CHANGING ECONOMIC CONDITIONS
TRADE-OFFS WITH FINANCIAL DECISIONS.
2
THE VALUE OF ITEMS OWNED MINUS THE AMOUNTS OWED TO OTHERS EQUALS
NET WORTH
TOTAL INCOME
TOTAL LIABILITIES
NET ASSETS
3
FURNITURE, JEWELRY, AND AN AUTOMOBILE ARE EXAMPLES OF LIQUID ASSETS.
False
True
4
WARRANTIES ARE COMMONLY ASSOCIATED WITH ________ PURCHASES.
FINANCIAL SERVICES
CREDIT
INVESTMENT
CONSUMER
5
CURRENT LIABILITIES DIFFER FROM LONG-TERM LIABILITIES BASED ON:
THE INTEREST RATE CHARGED
THE AMOUNT OWED
CURRENT ECONOMIC CONDITIONS
WHEN THE DEBT IS DUE.
6
WHICH OF THE FOLLOWING WOULD BE AN EXAMPLE OF A PERSONAL AND EMPLOYMENT DOCUMENT
PASSPORT
BUDGET
LEASE
SOCIAL SECURITY CARD
7
A PERSONAL BALANCE SHEET REPORTS YOUR INCOME AND EXPENSES.
False
True
8
LIQUID ASSETS REFER TO:
A BOTTLE OF GATORADE
THE VALUE OF INVESTMENTS
AMOUNTS THAT MUST BE PAID SOON.
ITEMS EASILY CONVERTED TO CASH
9
THE CURRENT FINANCIAL POSITION OF AN INDIVIDUAL OR FAMILY IS BEST PRESENTED WITH THE USE OF:
BUDGET
BALANCE SHEET
CASH FLOW STATEMENT
TIME VALUE OF MONEY
10
IF EXPENSES FOR A MONTH ARE GREATER THAN INCOME, AN INCREASE IN NET WORTH IS THE RESULT.
False
True
11
TAKE HOME PAY IS A PERSON'S EARNINGS AFTER DEDUCTIONS FOR TAXES AND OTHER ITEMS.
True
False
12
WHICH OF THE FOLLOWING FINANCIAL DOCUMENTS WOULD MOST LIKELY BE STORED IN A SAFE-DEPOSIT BOX.
W-2 FORM
SAVING CERTIFICATE
PERSONAL FINANCIAL STATEMENTS
WARRANTIES
13
WHICH OF THE FOLLOWING ILLUSTRATES AND INSOLVENT SITUATION:
ASSETS 56000 ANNUAL EXPENSES 60000
ASSETS 78000 NET WORTH 22000
ASSETS 40000 LIABILITIES 45000
14
FINANCIAL RECORDS THAT ARE REFERRED TO ON A REGULAR BASIS SHOULD BE KEPT IN A SAFE DEPOSIT BOX.
True
False
15
A PERSON'S NET WORTH IS COMPUTED BY:
ADDING ASSETS AND LIABILITIES
ADDING ASSETS AND LIABILITIES
DEDUCTING CURRENT LIVING EXPENSES FROM TOTAL ASSETS
SUBTRACTING TOTAL LIABILITIES FROM TOTAL ASSETS
16
BEN CHASE NEEDS TO PAY OFF SOME OF HIS DEBTS OVER THE NEXT FEW MONTHS WHICH SHOULD HE PAY OFF FIRST?
CURRENT LIABILITIES
LONG-TERM LIABILITIES
INVESTMENT ASSETS
CURRENT ASSETS
17
MONEY MANAGEMENT ACTIVITIES REFER TO LONG-TERM INVESTMENT DECISIONS.
TRUE
FALSE
18
A PERSON'S NET WORTH IS THE DIFFERENCE BETWEEN THE VALUE OF THE ITEMS OWNED AND THE AMOUNTS OWED TO OTHERS.
True
False
19
WHICH TYPE OF FINANCIAL RECORDS INCLUDES STOCK AND BOND REPORTS
INVESTMENT
TAX
ESTATE PLANNING
INSURANCE
20
A HOME FILE SHOULD BE USED
TRUE
FALSE
21
A PERSONAL CASH FLOW STATEMENT PRESENTS INCOME AND OUTFLOWS OF CASH FOR A GIVEN TIME PERIOD, SUCH AS A MONTH.
False
True
22
WHICH OF THE FOLLOWING WOULD BE CONSIDERED A LONG-TERM LIABILITY?
CHARGE ACCONT PAYMENT
AMOUNT DUE FOR TAXES
MORTGAGE
SIX MONTH PERSONAL LOAN
23
A HOME FILE SHOULD BE USED FOR:
FINANCIAL RECORDS FOR CURRENT NEEDS
STORING ALL FINANCIAL DOCUMENTS
DOCUMENT THAT REQUIRE MAXIMUM SECURITY
OBSOLETE DOCUMENTS
24
AN INDIVIDUAL RETIREMENT ACCOUNT IS AN EXAMPLE OF A(N) ________ ASSET.
COMMON
INVESTMENT
HOUSEHOLD
PERSONAL
25
OPPORTUNITY COSTS ARE ONLY ASSOCIATED WITH MONEY MANAGEMENT DECISIONS INVOLVING LONG TERM FINANCIAL SECURITY.
False
True
26
WHEN ONE MONEY MANAGEMENT DECISION IS MADE, AN ALTERNATIVE MUST BE GIVEN UP.
True
False
27
A PERSONS NET WORTH WOULD INCREASE AS A RESULT OF
DECREASE VALUE OF INVESTMENTS
INCREASE SPENDING
REDUCED EARNINGS
REDUCED AMOUNT OWED TO OTHERS
28
INSOLVENCY IS A RESULT OF HAVING MORE LIABILITIES THAN ASSETS.
False
True
29
ITEMS THAT YOU OWN WITH A MONETARY WORTH ARE REFERRED TO AS:
NET WORTH
ASSETS
INCOME
lIABILITIES
30
DEFINITE FINANCIAL OBLIGATIONS ARE REFERRED TO AS VARIABLE EXPENSES.
True
False
31
LIABILITIES ARE AMOUNTS REPRESENTING
ASSETS
LIVING EXPENSES
DEBTS
ITEMS OF VALUE
32
A PERSONAL BUDGET SHEET PRESENTS:
AMOUNTS BUDGET FOR SPENDING
EARNING ON SAVINGS
INCOME AND EXPENSES
ITEMS OWNED AND AMOUNTS OWED
33
A FAMILY WITH $45,000 IN ASSETS AND $22,000 IN LIABILITIES WOULD HAVE A NET WORTH OF:
$22,000
$45,000
$23,000
$67,000
34
A PERSONAL CASH FLOW STATEMENT CAN SERVE AS THE BASIS FOR THE BUDGET CATEGORIES USED BY AN INDIVIDUAL OR FAMILY.
False
True
35
A BUDGET IS A SPECIFIC PLAN OF HOW A PERSON OR FAMILY WILL SPEND THEIR MONEY.
False
True
