FINC 298 Chap 002 Practice Quiz

Chapter 02 - Money Management Skills
Chapter 02
Money Management Skills

True / False Questions

1. (p. 45) Money management refers to day-to-day financial activities necessary to manage
personal economic resources.
TRUE

Bloom's: Knowledge
Difficulty: Easy
Learning !"ecti#e: $
%opic: &oney management

2. (p. 45) Money management refers to annual financial activities necessary to manage personal
economic resources.
FALSE
Money management refers to day-to-day financial activities.

Bloom's: Knowledge
Difficulty: &edium

3. (p. 4') The focus of an organied system of financial records is to reduce credit card usage.
FALSE
The focus of an organied system is to handle daily !usiness activities.

Bloom's: (ompre)ension
Difficulty: Easy
%opic: *inancial records

2-1
". (p. 4+) # !udget is a record of ho$ a person or family has spent their money.
FALSE
# !udget is a spending plan% looking to the future.

Difficulty: &edium

&. (p. 4+) 'rograms are availa!le to help lo$-income older or disa!led people $ho have
difficulty !udgeting.
TRUE
(ased on the )*id +ou ,no$) section.

Bloom's: Knowledge
Difficulty: Easy
%opic: ,,-. &oney &anagement .rogram

-. (p. 4') .n an organied system% credit card records !elong in a safe deposit !o/.
FALSE
See 0/hi!it 2-1

Bloom's: Knowledge
Difficulty: Easy

2-2
1. (p. 4') .n an organied system% !irth and marriage certificates !elong in a safe deposit !o/.
TRUE
See 0/hi!it 2-1

Bloom's: Knowledge
Difficulty: Easy

2. (p. 4') .n an organied system% a $ill !elongs in a home file.
TRUE
See 0/hi!it 2-1

Bloom's: Knowledge
Difficulty: &edium

3. (p. 4/) 4inancial records that may need to !e referred to on a regular !asis should !e kept in a
safe-deposit !o/.
FALSE
These should !e kept in a home file.

Bloom's: Knowledge
Difficulty: Easy

10. (p. 4') .n an organied system% an annual stock investment statement !elongs in a safe
deposit !o/.
TRUE

Bloom's: Knowledge
Difficulty: &edium

2-3
11. (p. 4') 5ecords related to ta/ returns should !e saved for ten years.
FALSE
These should !e saved for seven years.

Bloom's: Knowledge
Difficulty: Easy

12. (p. 4') 6ills and Social Security data should !e kept for up to ten years.
FALSE
These should !e kept permanently.

Bloom's: Knowledge
Difficulty: Easy

13. (p. 40) The t$o primary personal financial statements include the personal !alance sheet and
a credit card payoff statement.
FALSE
The statements include the personal !alance sheet and the cash flo$ statement.

Bloom's: Knowledge
Difficulty: &edium
Learning !"ecti#e: 1
%opic: .ersonal financial statements

1". (p. 40) The current financial position of an individual or family is a common starting point
for financial planning.
TRUE

Difficulty: Easy
%opic: .ersonal !alance s)eet

2-"
1&. (p. 40) 7et $orth is the amount o$ed to others.
FALSE
8ia!ilities are amounts o$ed to others.

Bloom's: Knowledge
Difficulty: Easy
%opic: Determining amounts owed

1-. (p. 5$) Current lia!ilities are the de!ts you must pay $ithin a short time.
TRUE

Bloom's: Knowledge
Difficulty: Easy
%opic: Determining amounts owed

11. (p. 5$) Most people li9uidate their assets to calculate their net $orth.
FALSE
:ery fe$ people% if any% li9uidate all assets.

Difficulty: &edium
%opic: (omputing net wort)

12. (p. 5$) # cash flo$ statement uses the e9uation; assets - lia!ilities < net $orth.
FALSE
The e9uation is for a personal !alance sheet.

Difficulty: Easy
%opic: *inancial statements

2-&
13. (p. 52) # cash flo$ statement uses the e9uation; cash inflo$s - cash outflo$s < cash surplus
=deficit>
TRUE

Difficulty: Easy
%opic: *inancial statements

20. (p. 52) 6hen completing a cash flo$ statement% deductions are su!tracted from salary to
determine take home pay.
TRUE

Difficulty: Easy
%opic: (as) flow statement

21. (p. 52) 6hen completing a cash flo$ statement% take home pay less deductions e9uals
salary.
FALSE

Difficulty: &edium
%opic: (as) flow statement

22. (p. 5+) 4inancial advisers suggest that an emergency fund should cover one to t$o months of
living e/penses.
FALSE
#n emergency fund should cover three to si/ months of living e/penses.

Bloom's: Knowledge
Difficulty: &edium
%opic: Budget

2--
23. (p. 5+) 6hen creating a !udget% it is important to save the amount you have left at the end of
the month.
FALSE
.t is important to )pay yourself first.)

Bloom's: Knowledge
Difficulty: &edium
%opic: Budget

2". (p. +2) ?ne method to spend more money is to use a direct deposit system from payroll.
FALSE
*irect deposit is one method to make saving easier.

Bloom's: Knowledge
Difficulty: Easy
%opic: 3a#ings tec)ni4ues

2&. (p. +2) ?ne method to save more money is to $rite a check each payday and deposit it in a
savings account not readily availa!le for regular spending.
TRUE
*irect deposit is one method to make saving easier.

Bloom's: Knowledge
Difficulty: Easy
%opic: 3a#ings tec)ni4ues

2-1
Multiple Choie Questions

2-. (p. 45) Money management refers to
#. 'reparing personal financial statements.
!" *ay-to-day financial activities.
C. Trade-offs that occur $ith financial decisions.
*. Storing financial records for easy access.
0. Spending money on current living e/penses.

Difficulty: &edium

21. (p. 4+) 6hich of the follo$ing is 7?T a component of money management@
#. Creating personal financial records to document !usiness transactions and legal matters
(. Creating personal financial statements to measure and assess financial position and
progress
C. Creating a !udget
*. 7one of the a!ove are components of money management
E" #ll of the a!ove are components of money management

Difficulty: &edium
%opic: (omponents of money management

22. (p. 4') # home file should !e used for storing
#. #ll financial documents and records.
!" 4inancial records for current needs.
C. *ocuments that re9uire ma/imum security.
*. ?!solete financial documents.
0. 5ecords that are difficult to replace.

Difficulty: Easy
%opic: .ersonal financial records

2-2
23. (p. 4') 6hich of the follo$ing financial documents $ould most likely !e stored in a safe
deposit !o/@
#. 6-2 forms
(. personal financial statements
C. $arranties
#" marriage certificates
0. checking account statements

Difficulty: Easy

30. (p. 4') 6hich of the follo$ing is most correct@
#. # $arranty !elongs in a safe deposit !o/
(. # !irth certificate should !e kept in a personal computer system
C" Ta/ records !elong in a home file
*. 'ast !udgets !elong in a safe deposit !o/
0. #doption papers !elong in a home file
Aome file; 6arranty% ta/ records
Safe deposit !o/; (irth certificate% adoption papers
'ersonal computer system; 'ast !udgets

Bloom's: ,pplication
Difficulty: 5ard

2-3
31. (p. 4') 6hich of the follo$ing is most correct@
A" 5are coins and stamps !elong in a safe deposit !o/
(. # !irth certificate should !e kept in a personal computer system
C. 6-2s for ta/ records !elong in a safe deposit !o/
*. 'ast !udgets !elong in a safe deposit !o/
0. #doption papers !elong in a home file
Aome file; 6-2s for ta/ records
Safe deposit !o/; 5are coins% !irth certificate% adoption papers
'ersonal computer system; 'ast !udgets

Difficulty: 5ard

32. (p. 4') # !roker statement is an e/ample of a=n> BBBBBBBBBBBB record.
A" investment
(. insurance
C. estate planning
*. ta/
0. consumer purchase

Difficulty: Easy

33. (p. 4') The num!er of personal financial records a household has to organie may seem
over$helming. Ao$ long should you keep copies of your ta/ returns@
#. Cntil you receive your refund
(. Cntil the end of the current year
C. Three years
#" Seven years
0. 'ermanently

Difficulty: &edium

2-10
3". (p. 4') The num!er of personal financial records a household has to organie may seem
over$helming. Ao$ long should you keep documents relating to the purchase of real estate@
#. Cntil the mortgage is paid off
(. Cntil you move out of the house
C. Three years
*. Seven years
E" .ndefinitely

Difficulty: &edium

3&. (p. 4') Ao$ long should you keep documents relating to investments@
#. 7o need to since the !roker pro!a!ly has a copy
!" #s long as you o$n them
C. Seven years
*. Ten years
0. 'ermanently

Difficulty: &edium

3-. (p. 4') Ao$ long should you keep your most current $ill@
#. 7o need to keep it since your la$yer pro!a!ly has a photocopy
(. ?ne year
C. Three years
*. Seven years
E" 'ermanently

Difficulty: &edium

2-11
31. (p. 40) The main purposes of personal financial statements are to;
#. 5eport your current financial position
(. Measure your progress to$ard financial goals
C. Maintain information a!out your financial activities
*. 'rovide data for preparing ta/ forms or applying for credit
E" These are all correct

Difficulty: Easy

32. (p. 40) 6hich of the follo$ing are considered to !e the primary personal financial
statements@
#. (udget and credit card statements
!" (alance sheet and cash flo$ statement
C. Check!ook and !udget
*. Ta/ returns
0. (ank statement and savings pass!ook

Difficulty: &edium

33. (p. 40) # personal !alance sheet presents
#. #mounts !udgeted for spending.
(. .ncome and e/penses for a period of time.
C. 0arnings on savings and investments.
#" .tems o$ned and amounts o$ed.
0. 4amily financial goals.

Difficulty: &edium

2-12
"0. (p. 40) The current financial position of an individual or family is !est presented $ith the use
of a=n>
#. (udget.
(. Cash flo$ statement.
C" (alance sheet.
*. (ank statement.
0. Time value of money report.

Difficulty: &edium

"1. (p. 40) #nother name for a statement of financial position is a
A" (alance sheet.
(. (ank statement.
C. (udget.
*. Cash flo$ statement.

Difficulty: 5ard

"2. (p. 40) The statement that includes li9uid assets% real estate% personal possessions% and
investment assets is kno$n as a
A" 'ersonal !alance sheet.
(. (ank statement.
C. (udget.
*. Cash flo$ statement.

Difficulty: &edium

2-13
"3. (p. 5$) .tems $ith value are referred to as
#. 8ia!ilities.
(. :aria!le e/penses.
C. 7et $orth.
*. .ncome.
E" #ssets.

Difficulty: Easy

"". (p. 5675$) 6hich of the follo$ing is 7?T a li9uid asset@
#. Cash $ithdra$n from an #TM
(. Cash value of life insurance
C. Checking account !alance
*. Coins in a Dar at home
E" 5etirement investments

Difficulty: &edium
%opic: ,ssets

"&. (p. 5675$) 6hen creating a personal !alance sheet% $hich of the follo$ing is a real estate
asset@
#. Cash value of life insurance
!" :acation property
C. 'ossessions in your home
*. .nvestments for a dream home
0. Mutual funds

Difficulty: 5ard
%opic: ,ssets

2-1"
"-. (p. 4075$) 6hen creating a personal !alance sheet% $hich of the follo$ing is considered to !e
a personal possession asset@
A" # five-year-old television set
(. # home
C. Cash $ithdra$n from an #TM
*. 5etirement investments
0. :acation property

Difficulty: 5ard
%opic: ,ssets

"1. (p. 4075$) 6hen creating a personal !alance sheet% $hich of the follo$ing is an investment
asset@
#. Cash value of life insurance
(. Checking account
C. 'ossessions in your home
#" 5etirement account
0. :acation property

Difficulty: &edium
%opic: ,ssets

"2. (p. 4075$) 6hen creating a personal !alance sheet% $hich of the follo$ing is a current
lia!ility@
#. Checking account
(. 7et $orth
C. #uto loan
*. Money your sister o$es you in t$o years
E" Charge account

Difficulty: &edium
%opic: Lia!ilities

2-1&
"3. (p. 40) The amount you $ould have if everything of value $ould !e sold and all de!ts $ould
!e paid in full.
#. 7et assets.
!" 7et $orth.
C. Total lia!ilities.
*. Total income.
0. (udgeted e/penses.

Difficulty: &edium
%opic: 8et wort)

&0. (p. 40) The e9uation to calculate net $orth is;
#. #ssets - cash outflo$s < net $orth
(. Cash inflo$s - lia!ilities < net $orth
C. Cash inflo$s - cash outflo$s < net $orth
#" #ssets - lia!ilities < net $orth
0. Cash inflo$s E lia!ilities < net $orth

Difficulty: &edium
%opic: 8et wort)

&1. (p. 5$) The ina!ility to pay de!ts $hen they are due is called;
#. 8ia!ilities
!" .nsolvency
C. 7et $orth
*. Cash flo$
0. 8i9uid assets

Difficulty: &edium
%opic: 8et wort)

2-1-
&2. (p. 5$) 6hich of the follo$ing situations descri!es a person $ho could !e insolvent@
#. #ssets F&-%000G annual e/penses F-0%000
(. #ssets F12%000G net $orth F22%000
C. 8ia!ilities F"&%000G net $orth F-%000
#" #ssets F"0%000G lia!ilities F"&%000
0. #nnual cash inflo$s F"&%000G lia!ilities F&0%000

Difficulty: &edium
%opic: 8et wort)

&3. (p. 51) #ll of the follo$ing are $ays that households can increase their net $orth e9cept:
#. .ncrease their savings
(. 5educe spending
C. .ncrease value of investments
*. 5educe amounts o$ed
E" .ncrease their de!t ratio

Difficulty: &edium
%opic: 8et wort)

&". (p. 51) 6hich of the follo$ing $ill increase the net $orth of a household@
#. *ecrease saving !y F&0 per month
(. .ncrease the amount !orro$ed for maDor purchases
C" *ecrease spending !y F& per day
*. .nvest in possessions $hose values do not increase
0. ,eep an e/tra F100 in a checking account instead of a savings account

Difficulty: &edium
%opic: 8et wort)

2-11
&&. (p. 56 7 51) 6hich of the follo$ing is a cash inflo$@
#. Mail rent check
(. (uy groceries
C. Make a loan payment
#" 5eceive a paycheck
0. 'ay medical e/penses

Difficulty: Easy
%opic: (as) flows

&-. (p. 52) 6hich of the follo$ing appears on a cash flo$ statement@
#. #ssets
!" 'ayments for varia!le e/penses
C. 7et $orth
*. 8ia!ilities
0. .nvestment transfers
The other choices $ould appear on a !alance sheet.

Difficulty: &edium
%opic: (as) flows

&1. (p. 52) 6hich of the follo$ing appears on a cash flo$ statement@
#. Aome value
!" 8oan payment
C. 7et $orth
*. (alance of mortgage
0. Transfer from one mutual fund to another
The other choices $ould appear on the personal !alance sheet.

Difficulty: 5ard
%opic: (as) flows

2-12
&2. (p. 51) 4inancial e/perts recommend a monthly savings ratio of at least BBBB of gross
income.
#. 0H
!" & - 10H
C. 20H
*. 2& - 3&H
0. &0H

Bloom's: Knowledge
Difficulty: &edium
%opic: -atios for e#aluating financial progress

&3. (p. 51) 4inancial e/perts recommend a de!tIpayments ratio of less than BBBB of take-home
pay.
#. 0H
(. & - 10H
C" 20H
*. 2& - 3&H
0. &0H

Bloom's: Knowledge
Difficulty: &edium

-0. (p. 51) # current ratio of 2 means;
#. 2H from each paycheck is availa!le for savings
(. The minimum payment for a credit card is 2H of the !alance
C. 2 months of living e/penses are availa!le in case of emergency
*. 7et $orth e9uals 2 times the amount of de!t
E" F2 of li9uid assets are availa!le for every F1 in current lia!ilities

Bloom's: ,nalysis
Difficulty: 5ard

2-13
-1. (p. 51) # de!t ratio of 0.& indicates;
#. The !alance on the mortgage < &0H of the value of the home
!" 4or every dollar of net $orth% de!t e9uals F0.&0
C. 4or every dollar of de!t% net $orth e9uals F0.&0
*. 4or every dollar of take-home pay% monthly credit payments e9ual F0.&0
0. 4or every dollar of assets% monthly credit payments e9ual F0.&0

Bloom's: ,nalysis
Difficulty: 5ard

-2. (p. 51) 6hich of the follo$ing ratios sho$s the relationship !et$een de!t and net $orth@
A" *e!t ratio
(. Current ratio
C. Aousehold ratio
*. *e!t payments ratio
0. Savings ratio

Bloom's: ,nalysis
Difficulty: &edium

-3. (p. 51) 6hich of the follo$ing ratios indicates that li9uid assets are availa!le to pay
lia!ilities for a household@
#. *e!t ratio
!" Current ratio
C. 8i9uidity ratio
0. Savings ratio

Bloom's: ,nalysis
Difficulty: &edium

2-20
-". (p. 51) 6hich of the follo$ing ratios indicates the num!er of months in $hich living
e/penses can !e paid if an emergency arises@
#. *e!t ratio
(. Current ratio
C" 8i9uidity ratio
0. Savings ratio

Bloom's: ,nalysis
Difficulty: &edium

-&. (p. 51) 6hich of the follo$ing ratios indicates the amount of a personJs earnings that goes
for payments for credit cards% auto loans% and other de!t =e/cept mortgage>@
#. *e!t ratio
(. Current ratio
C. 8i9uidity ratio
#" *e!t payments ratio
0. Savings ratio

Bloom's: ,nalysis
Difficulty: &edium

--. (p. 51) 6hich of the follo$ing ratios sho$s the relationship !et$een gross income and
money not spent@
#. *e!t ratio
(. Current ratio
C. 8i9uidity ratio
E" Savings ratio

Bloom's: ,nalysis
Difficulty: 5ard

2-21
-1. (p. 51752) #ll of the follo$ing are sources of income e9cept
#. .nterest
(. Commission
C. *ividends
*. Salary
E" Social security ta/es

Difficulty: Easy
%opic: (as) flows

-2. (p. 52) 6hich of the follo$ing is a deduction to determine take-home pay@
#. .nterest
(. Commissions
C. *ividends
*. Salary
E" Social security ta/es

Difficulty: Easy
%opic: (as) flows

-3. (p. 52) *isposa!le income e9uals
#. Kross income
!" Take-home pay
C. #mount !eing saved each month
*. Money left over after paying for housing% food% and other necessities
0. Social security ta/es

Difficulty: &edium
%opic: (as) flows

2-22
10. (p. 52) *iscretionary income e9uals
#. Kross income
(. Take-home pay
C. #mount !eing saved each month
#" Money left over after paying for housing% food% and other necessities
0. Social security ta/es

Difficulty: &edium
%opic: (as) flows

11. (p. 52) The money left over after paying for housing% food% and other necessities is called
#. Monthly savings
!" *iscretionary income
C. *isposa!le income
*. Kross income
0. Take-home pay

Difficulty: &edium
%opic: (as) flows

12. (p. 52) #nother name for take-home pay is
#. Monthly savings
(. *iscretionary income
C" *isposa!le income
*. Kross income
0. *eductions

Difficulty: &edium
%opic: (as) flows

2-23
13. (p. 54) #n e/ample of a varia!le e/pense is
#. Mortgage payment
(. .nstall loan payment
C. Monthly !us pass
*. #llocation for life insurance
E" 0lectric !ill

Difficulty: Easy
%opic: (as) outflows

1". (p. 52) #ll of the follo$ing are fi/ed e/penses e9cept
#. Mortgage payment
(. .nstallment loan payment
C. Monthly !us pass
*. #llocation for life insurance
E" 0lectric !ill

Difficulty: &edium

1&. (p. 52) #n e/ample of a fi/ed e/pense is
#. Medical e/penses
(. Kifts
C. Ctilities
#" Mortgage
0. 5ecreation

Difficulty: Easy

2-2"
1-. (p. 55) 6hich of the follo$ing is 7?T a main purpose of a !udget@
#. Aelp to live $ithin your income
!" Spend your money $ithout care
C. 5each financial goals
*. 'repare for financial emergencies
0. *evelop $ise financial management ha!its
# correct goal for ( is to spend your money $isely.

Difficulty: Easy
%opic: Budgets

11. (p. 5575+) 6hen creating a !udget% $hich of the follo$ing statements is true@
#. 'lan on your income !eing the same as last year.
(. .t is easier to create a !udget if your earnings vary.
C. Common financial pro!lems can !e ma/imied through !udgeting.
#" 7um!ers in the !udget are estimates.
0. .t is !etter to overestimate your income for ne/t year.
# - estimate your income for the given time periodG ( - varia!le earnings make it more
difficult to !udget incomeG C - common financial pro!lems can !e minimied through
!udgetingG 0 - it is !etter to only include money that you are sure youJll receive.

Difficulty: &edium
%opic: Budgets

12. (p. 5+) 6hen creating a !udget% it is important to;
#. Save the amount you have left at the end of the month.
(. Set aside savings after your varia!le e/penses are paid.
C. Save an amount no more than three percent of your annual income in emergency fund.
*. Spend the amount of money you have !udgeted in each category.
E" Set aside savings !efore other e/penses are !udgeted.

Difficulty: &edium
%opic: Budgets

2-2&
13. (p. 50) The difference !et$een the amount !udgeted and the actual amount received or spent
is called the
A" :ariance
(. Cash outflo$
C. .ncome
*. Cash inflo$
0. :aria!le e/pense

Bloom's: Knowledge
Difficulty: Easy
%opic: Budgets

20. (p. 50) # !udget deficit $ould result $hen a personJs or familyJs
#. #ctual e/penses are less than planned e/penses.
(. #ssets e/ceed lia!ilities.
C. #ctual e/penses e9ual planned e/penses.
#" #ctual e/penses are greater than planned e/penses.
0. 7et $orth decreases.

Difficulty: Easy
%opic: Budgets

21. (p. 50) #fter the !udget is created% it is important to
#. 4ile the !udget in a safe deposit !o/
(. Compare it to the previous !udget
C" Track spending and identify variances
*. ?nly pay attention to e/penses that are more than 10 percent of your salary
0. 7one of the a!ove are true since !udgets are Dust estimates

Difficulty: &edium
%opic: Budgets

2-2-
22. (p. 50) 6hich of the follo$ing categories $ould !e most difficult to cut from a household
!udget@
#. :acations
(. 8a$n services
C. Ca!le
*. Charita!le donations
E" #uto insurance
Many admit that auto insurance is a necessary e/pense% the others are discretionary.

Difficulty: Easy
%opic: Budgets

23. (p. +6) # !udget that involves envelopes% folders or containers to hold money or slips of
paper is called a
#. Mental !udget
!" 'hysical !udget
C. 6ritten !udget
*. Computeried !udget
0. #llocated !udget

Bloom's: Knowledge
Difficulty: Easy
%opic: Budgets

2". (p. +6) # !udget that can !e kept on note!ook paper or !udgeting paper is called a
#. Mental !udget
(. 'hysical !udget
C" 6ritten !udget
*. Computeried !udget
0. #llocated !udget

Bloom's: Knowledge
Difficulty: Easy
%opic: Budgets

2-21
2&. (p. +$7+2) The document that $ould !e most useful to track spending patterns for the past fe$
months is
#. (alance sheet
!" Cash flo$ statement
C. (udget
*. #ll of the a!ove
0. 7one of the a!ove
See Concept Check 2-"

Difficulty: &edium

2-. (p. +$) The document that $ould !e most useful to track planned spending patterns for the
ne/t month is
#. (alance sheet
(. Cash flo$ statement
C" (udget
*. #ll of the a!ove

Difficulty: &edium

2-22
21. (p. +$) The document that $ould !e most useful to track current value of investment
accounts is
A" (alance sheet
(. Cash flo$ statement
C. (udget
*. #ll of the a!ove

Difficulty: &edium

22. (p. 5$) # family $ith F"&%000 in assets and F22%000 of lia!ilities $ould have a net $orth of
#. F22%000
!" F23%000
C. F"1%000
*. F"&%000
0. F-1%000
#ssets - lia!ilities < F"&%000 - 22%000 < F23%000

Difficulty: Easy
%opic: 8et wort)

2-23
23. (p. 5$) 'atrick Kuitman has a net $orth of F1&-%000 and lia!ilities of F1-1%000. 6hat are his
total assets@
#. F11%000
(. F1&-%000
C. F1-1%&00
*. F1-1%000
E" F323%000
7et $orth E lia!ilities < F1&-%000 E 1-1%000 < F323%000

Difficulty: &edium
%opic: 8et wort)

30. (p. 5$) Kiven the follo$ing information% calculate the net $orth;
#ssets < F&000
Cash inflo$s < F"&00
Cash outflo$s < F2000
8ia!ilities < F1000
#. F&00
(. F1000
C. F2&00
*. F3000
E" F"000
#ssets - lia!ilities < F&000 - 1000 < F"000

Difficulty: &edium
%opic: 8et wort)

2-30
31. (p. 51) Kiven the follo$ing information% calculate the de!t ratio percentage;
8ia!ilities F2"%000
8i9uid assets F"%"00
Monthly credit payments F300
Monthly savings F2-0
7et $orth F12%000
Current lia!ilities F1%100
Take-home pay F1%200
Kross income F3%000
Monthly e/penses F1%&"0
A" 33.3
(. "
C. 2.2-
*. 1-.-1
0. 2.-1
lia!ilitiesInet $orth - 2"%000I12%000 < 33.3H

Difficulty: 5ard
%opic: -atios

2-31
32. (p. 51) Kiven the follo$ing information% calculate the current ratio;
8ia!ilities F2"%000
7et $orth F12%000
Kross income F3%000
#. 33.3
!" "
C. 2.2-
*. 1-.-1
0. 2.-1
li9uid assetsIcurrent lia!ilities - ""00I1100 < "

Difficulty: 5ard
%opic: -atios

2-32
33. (p. 51) Kiven the follo$ing information% calculate the li9uidity ratio;
8ia!ilities F2"%000
7et $orth F12%000
Kross income F3%000
#. 33.3
(. "
C" 2.2-
*. 1-.-1
0. 2.-1
li9uid assetsImonthly e/penses - ""00I1&"0 < 2.2-

Difficulty: 5ard
%opic: -atios

2-33
3". (p. 51) Kiven the follo$ing information% calculate the de!t payments ratio;
8ia!ilities F2"%000
7et $orth F12%000
Kross income F3%000
#. 33.3 percent
(. " percent
C. 2.2- percent
#" 1-.-1 percent
0. 2.-1 percent
monthly credit paymentsItake-home pay < F300IF1%200 < .1--1 < 1-.-1H

Difficulty: 5ard
%opic: -atios

2-3"
3&. (p. 51) Kiven the follo$ing information% calculate the savings ratio;
8ia!ilities F2"%000
7et $orth F12%000
Kross income F3%000
#. 33.3 percent
(. " percent
C. 2.2- percent
*. 1-.-1 percent
E" 2.-1 percent
monthly savingsIgross income < F2-0IF3000 < .02-1 < 2.-1H

Difficulty: 5ard
%opic: -atios

3-. (p. 5') 5e!ecca Kladlyn !udgeted F3"& for a ne$ $ardro!e in Lune. She actually spent
F312. 6hat is her !udget variance@
#. F312 deficit
!" F33 deficit
C. F123 deficit
*. F33 surplus
0. F3"& surplus
F3"& !udgeted less F312 spent < F33 deficit.
7ote; Similar to self-test pro!lem M2.

Difficulty: &edium
%opic: Budget

2-3&
31. (p. 5') 5e!ecca Kladlyn !udgeted F10&0 for housing and utilities in Luly. She actually spent
F3-2. 6hat is her !udget variance@
#. F3-2 deficit
(. F22 deficit
C. F"" deficit
#" F22 surplus
0. F3-2 surplus
F10&0 !udgeted less F3-2 spent < F22 surplus.
7ote; Similar to self-test pro!lem M2.

Difficulty: &edium
%opic: Budget

2-3-

FINC 298 Chap 002 Practice Quiz

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FINC 298 Chap 002 Practice Quiz

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Chapter 02 - Money Management Skills

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