Question 1

Under a direct deposit system the bank will make an automatic debit from your bank account and have the funds transferred periodically to an investment account.

Accepted Answer

A) True 
 B)False

Question 2

A person's net worth would increase as a result of

Accepted Answer

A)   decreased value on investments
B)   reduced earnings.
C)   increased spending for current living expenses.
D)   increased value of personal possessions.
E)   increased amount owed to others.F) C) and E)
G) C) and D)

Question 3

During the last month, Astrid had expenses of $6,000 and an increase in net worth of $100. This means Astrid's income for the month was:

Accepted Answer

A)   $6,000
B)   $5,900
C)   $6,100
D)   $5,700
E)   $5,200F) A) and E)
G) B) and E)

Question 4

A cash flow statement reports a person's or a family's

Accepted Answer

A)   net worth.
B)   current income and payments.
C)   plan for spending.
D)   value of investments.
E)   balance of savings.F) B) and C)
G) C) and D)

Question 5

Evidence exists that a person's choice of employment influences his or her lifestyle.

Accepted Answer

A) True 
 B)False

Question 6

A home file should be used for:

Accepted Answer

A)   storing all financial documents and records.
B)   obsolete financial documents.
C)   documents that require maximum security.
D)   financial records for current needs.
E)   records that are difficult to replace.F) A) and E)
G) B) and C)

Question 7

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 8

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) C) and E)
G) A) and B)

Question 9

Common reasons for saving money include:

Accepted Answer

A)   To set aside money for irregular and unexpected expenses
B)   To pay for the replacement of expensive items, such as appliances or an automobile, or to have money for a down payment on a house
C)   To buy special items, such as home video or recreational equipment, or to pay for a vacation
D)   To provide for long-term expenses, such as the education of children or retirement.
E)   All of the aboveF) A) and B)
G) A) and C)

Question 10

Insolvency is a result of having an unequal balance of tangible and intangible goods.

Accepted Answer

A) True 
 B)False

Question 11

A personal balance sheet presents

Accepted Answer

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

Question 12

A person with $80,000 in assets and $122,000 of liabilities would have a net worth of:

Accepted Answer

A)   $80,000.
B)   $122,000.
C)   $202,000
D)   $42,000.
E)   - $42,000.F) B) and C)
G) C) and D)

Question 13

A person's net worth would increase as a result of

Accepted Answer

A)   increased value on investments
B)   reduced earnings.
C)   increased spending for current living expenses.
D)   decreased value of personal possessions.
E)   increased amounts owed to others.F) A) and E)
G) None of the above

Question 14

Liabilities are cash and items of value that can be easily converted to cash.

Accepted Answer

A) True 
 B)False

Question 15

Opportunity costs are only associated with money management decisions involving long-term financial security.

Accepted Answer

A) True 
 B)False

Question 16

What are the main components of a personal balance sheet and a cash flow statement? What is the main purpose of each of these personal financial statements?

Accepted Answer

A personal balance sheet is a net worth ...

Question 17

The main purpose of a budget is to help you

Accepted Answer

A)   Live within your income and spend your money wisely
B)   Prioritize and attain your financial goals
C)   Prepare for financial emergencies
D)   Develop wise financial management habits
E)   All of the aboveF) A) and B)
G) A) and E)

Question 18

A cash flow statement is a record of how a person or family has earned and spent their money.

Accepted Answer

A) True 
 B)False

Question 19

What are the 7 steps in creating and implementing a budget?

Accepted Answer

[1] Setting financial goals.
[2] Estimat...

Question 20

Janice spends a total of $1,500 a month to cover all living expenses. Which of the following would represent the minimum acceptable emergency fund?

Accepted Answer

A)   Zero
B)   $1,500
C)   $4,500
D)   $9,000
E)   $3,000F) A) and B)
G) A) and C)

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Janice spends a total of $1,500 a month to cover all living expenses. Which of the following would represent the minimum acceptable emergency fund?

Correct AnswerverifiedShow Answer

Common reasons for saving money include:

Correct AnswerverifiedShow Answer

A cash flow statement reports a person's or a family's

Correct AnswerverifiedShow Answer

What are the 7 steps in creating and implementing a budget?

Correct Answerverified[1] Setting financial goals.[2] Estimat...View AnswerShow Answer

A person's net worth would increase as a result of

Correct AnswerverifiedShow Answer

Under a direct deposit system the bank will make an automatic debit from your bank account and have the funds transferred periodically to an investment account.

Correct AnswerverifiedShow Answer

A home file should be used for:

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

The main purpose of a budget is to help you

Correct AnswerverifiedShow Answer

Insolvency is a result of having an unequal balance of tangible and intangible goods.

Correct AnswerverifiedShow Answer

A person with $80,000 in assets and $122,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

A personal balance sheet presents

Correct AnswerverifiedShow Answer

A cash flow statement is a record of how a person or family has earned and spent their money.

Correct AnswerverifiedShow Answer

A person's net worth would increase as a result of

Correct AnswerverifiedShow Answer

What are the main components of a personal balance sheet and a cash flow statement? What is the main purpose of each of these personal financial statements?

Correct AnswerverifiedA personal balance sheet is a net worth ...View AnswerShow Answer

Liabilities are cash and items of value that can be easily converted to cash.

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

During the last month, Astrid had expenses of $6,000 and an increase in net worth of $100. This means Astrid's income for the month was:

Correct AnswerverifiedShow Answer

Opportunity costs are only associated with money management decisions involving long-term financial security.

Correct AnswerverifiedShow Answer

Evidence exists that a person's choice of employment influences his or her lifestyle.

Correct AnswerverifiedShow Answer

Correct Answer
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[1] Setting financial goals.
[2] Estimat...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A personal balance sheet is a net worth ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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