Question 1

A person's net worth is computed by

Accepted Answer

A)  subtracting total liabilities from total assets.
B)  deducting currentliving expenses from total assets.
C)  adding assets and liabilities
D)  subtracting assets from currentliabilities.
E)  adding liabilities and budgeted expenses.F) A) and D)
G) A) and C)

Question 2

Which of the following financial documents would most likely be stored in a home file?

Accepted Answer

A)  Serial numbersof expensive items
B)  Personal financial statements
C)  Mortgage papers,title deed
D)  Birth, marriage and death certificates
E)  Guaranteed investment securitiesF) D) and E)
G) A) and B)

Question 3

Ed Bostromwants to reduce his fixed expenses.What action would be appropriate?

Accepted Answer

A)  Get a part-time job
B)  Eat more meals at home than in restaurants
C)  Find a place to live with a lower rent
D)  Save more money for the future
E)  Buy on credit for items that might cost more laterF) A) and C)
G) B) and E)

Question 4

Improvements in a person's financial position are the result of:

Accepted Answer

A)  increased liabilities.
B)  reductions in earnings.
C)  increased savingsand investments.
D)  increased purchases on credit.
E)  lower amountsdeposited in savings.F) B) and C)
G) C) and E)

Question 5

Opportunity costs are not only associated with money management decisions involving long-term financial security.

Accepted Answer

A) True 
 B)False

Question 6

Janice spends a total of $3,300 a month to cover all living expenses.Which of the following would represent the maximum suggested acceptable emergency fund?

Accepted Answer

A)  Zero
B)  $3,300
C)  $9,9500
D)  $19,800
E)  $6,600F) All of the above
G) D) and E)

Question 7

A major expenditure for most families is

Accepted Answer

A)  insurance.
B)  contributions.
C)  clothing.
D)  utilities.
E)  transportation.F) None of the above
G) A) and D)

Question 8

Take-home pay is a person's earnings after deductions for taxes and other items.

Accepted Answer

A) True 
 B)False

Question 9

During the past month, Jennifer Sinnet had income of $3,500 and a decrease in net worth of $200.This means Jennifer's payments for the month were:

Accepted Answer

A)  $3,700.
B)  $3,300.
C)  $2,800.
D)  $1,000.
E)  $200.F) A) and D)
G) A) and C)

Question 10

An organized system of financial records provides a basis for:

Accepted Answer

A)  Determining available resources for current and future buying.
B)  Handling long term business affairs
C)  Handling moderate term business affairs
D)  Cash flow projectionsE) A) and B)
F) A) and C)

Question 11

An organized system of financial records provides a basis for:

Accepted Answer

A)  Completing required tax reports.
B)  Handling long term business affairs
C)  Handling moderate term business affairs
D)  Cash flow projectionsE) A) and B)
F) All of the above

Question 12

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?

Accepted Answer

A)  the budget variance
B)  investment assets
C)  long-term liabilities
D)  current liabilities
E)  current assetsF) A) and C)
G) A) and B)

Question 13

A personal balance sheet presents

Accepted Answer

A)  items owned and amountsowed.
B)  income and expenses for a period of time.
C)  earnings on savingsand investments.
D)  amounts budgeted for spending
E)  family financial goals.F) A) and C)
G) A) and B)

Question 14

Payments that do vary from month to month are ____________ expenses.

Accepted Answer

A)  fixed
B)  current
C)  variable
D)  luxury
E)  budgetedF) A) and B)
G) D) and E)

Question 15

Current liabilities are amounts that must be paid within a short period of time, usually less than a year.

Accepted Answer

A) True 
 B)False

Question 16

An individual retirement account is an example of a(n)  ____________ asset.

Accepted Answer

A)  liquid
B)  common
C)  investment
D)  household
E)  budgetedF) C) and D)
G) A) and E)

Question 17

Total earnings of a person less deductions for taxes and other items is called

Accepted Answer

A)  budgeted income.
B)  gross pay.
C)  net worth.
D)  total revenue.
E)  take-home pay.F) A) and B)
G) B) and E)

Question 18

This year Phil's gross income is $80,000.His deductions for federal and provincial taxes, CPP contributions and employment insurance are $16,000.He also had after-tax investment earnings of $6,000.Taylor's take-home pay is:

Accepted Answer

A)  $80,000
B)  $86,000
C)  $70,000
D)  $64,000
E)  $58,000F) A) and B)
G) C) and D)

Question 19

Most Canadians have an adequate savings for emergencies.

Accepted Answer

A) True 
 B)False

Question 20

"Sharing the bills" is a budgeting strategy for two-income households where each partner contributes an equal amount into the pool.

Accepted Answer

A) True 
 B)False

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?

Correct AnswerverifiedShow Answer

Payments that do vary from month to month are ____________ expenses.

Correct AnswerverifiedShow Answer

Which of the following financial documents would most likely be stored in a home file?

Correct AnswerverifiedShow Answer

A major expenditure for most families is

Correct AnswerverifiedShow Answer

An organized system of financial records provides a basis for:

Correct AnswerverifiedShow Answer

Total earnings of a person less deductions for taxes and other items is called

Correct AnswerverifiedShow Answer

An organized system of financial records provides a basis for:

Correct AnswerverifiedShow Answer

This year Phil's gross income is $80,000.His deductions for federal and provincial taxes, CPP contributions and employment insurance are $16,000.He also had after-tax investment earnings of $6,000.Taylor's take-home pay is:

Correct AnswerverifiedShow Answer

Most Canadians have an adequate savings for emergencies.

Correct AnswerverifiedShow Answer

Take-home pay is a person's earnings after deductions for taxes and other items.

Correct AnswerverifiedShow Answer

"Sharing the bills" is a budgeting strategy for two-income households where each partner contributes an equal amount into the pool.

Correct AnswerverifiedShow Answer

Janice spends a total of $3,300 a month to cover all living expenses.Which of the following would represent the maximum suggested acceptable emergency fund?

Correct AnswerverifiedShow Answer

A personal balance sheet presents

Correct AnswerverifiedShow Answer

Opportunity costs are not only associated with money management decisions involving long-term financial security.

Correct AnswerverifiedShow Answer

During the past month, Jennifer Sinnet had income of $3,500 and a decrease in net worth of $200.This means Jennifer's payments for the month were:

Correct AnswerverifiedShow Answer

A person's net worth is computed by

Correct AnswerverifiedShow Answer

Improvements in a person's financial position are the result of:

Correct AnswerverifiedShow Answer

Current liabilities are amounts that must be paid within a short period of time, usually less than a year.

Correct AnswerverifiedShow Answer

Ed Bostromwants to reduce his fixed expenses.What action would be appropriate?

Correct AnswerverifiedShow Answer

An individual retirement account is an example of a(n) ____________ asset.

Correct AnswerverifiedShow Answer

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