Test Bank for Personal Finance 7Th Canadian edition By Kapoor

Description

Test Bank for Personal Finance 7Th Canadian edition By Kapoor

Chapter 02

Money Management Strategy: Financial Statements and Budgeting

  True / False Questions

1. When one money management decision is selected, something else must be given up.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Recognize relationships among financial documents and money management activities.
Topic: 02-01 Planning for Successful Money Management

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

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Recognize relationships among financial documents and money management activities.
Topic: 02-01 Planning for Successful Money Management

3. Financial records that may need to be referred to on a regular basis should not be kept in a safety deposit box.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Create a system for maintaining personal financial records.
Topic: 02-04 A System for Personal Financial Records

4. A budget is a record of how a person or family has spent their money.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-04 Create and implement a budget.
Topic: 02-09 Budgeting: A Money Management Skill

5. Personal records current budget, checkbook(s), and bank statements.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Create a system for maintaining personal financial records.
Topic: 02-04 A System for Personal Financial Records

6. Most income tax documents and records should be kept in a safety deposit box.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Create a system for maintaining personal financial records.
Topic: 02-04 A System for Personal Financial Records

7. Insolvency is the inability to pay debts by the due date, because liabilities exceed the value of assets.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

8. A person’s net worth is the difference between the value of the items owned and the amounts owed to others.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

9. Furniture, jewelry, and an automobile are examples of liquid assets.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

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

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

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

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

12. A personal cash flow statement presents income and outflows of cash for a given time period, such as a month.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

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

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

14. Medical expenses, clothing, and telephone are examples of fixed expenses.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability

15. If expenses for a month are greater than income, an increase in net worth will result.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Develop a personal balance sheet and cash flow statement.
Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability