Question 1

Leveraged investing in common shares is expected to increase your net worth.

Accepted Answer

A) True 
 B)False

Question 2

If a family planned to spend $370 for food during March but only spent $348,this difference would be referred to as a

Accepted Answer

A)   surplus.
B)   deficit.
C)   fixed living expense.
D)   budget reduction.
E)   contribution to net worth.F) B) and E)
G) All of the above

Question 3

Which of the following payments would be considered a variable expense?

Accepted Answer

A)   Rent
B)   An installment loan payment
C)   A mortgage payment
D)   A monthly parking fee
E)   A telephone billF) C) and D)
G) B) and E)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following situations is a person who could be insolvent?

Accepted Answer

A)   Assets $56,000; annual expenses $60,000
B)   Assets $68,000; net worth $22,000
C)   Liabilities $45,000; net worth $6,000
D)   Assets $60,000; liabilities $61,000
E)   Annual cash inflows $48,000; liabilities $50,000F) All of the above
G) A) and B)

Question 6

Personal records current budget,cheque book(s)and bank statements.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 E)
G) A) and C)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

A major expenditure for most families is

Accepted Answer

A)   insurance.
B)   contributions.
C)   clothing.
D)   utilities.
E)   transportation.F) A) and B)
G) A) and C) E

Question 13

A person's net worth is computed by

Accepted Answer

A)   subtracting total liabilities from total assets.
B)   deducting current living expenses from total assets.
C)   adding assets and liabilities
D)   subtracting assets from current liabilities.
E)   adding liabilities and budgeted expenses.F) None of the above
G) B) and C) A

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

A personal cash flow statement can serve as the basis for the budget categories used by an individual or family.

Accepted Answer

A) True 
 B)False  True

Question 16

The payment items that should be budgeted first are

Accepted Answer

A)   variable expenses.
B)   investment funds.
C)   fixed expenses.
D)   unplanned living expenses.
E)   entertainment expenses.F) B) and E)
G) B) and C)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A person's lifestyle is a reflection of his or her values,goals,career,and family situation.

Accepted Answer

A) True 
 B)False

Question 19

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 B)
G) All of the above

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 Skills

Leveraged investing in common shares is expected to increase your net worth.

Correct AnswerverifiedShow Answer

If a family planned to spend $370 for food during March but only spent $348,this difference would be referred to as a

Correct AnswerverifiedShow Answer

Which of the following payments would be considered a variable expense?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following situations is a person who could be insolvent?

Correct AnswerverifiedShow Answer

Personal records current budget,cheque book(s)and bank statements.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A major expenditure for most families is

Correct AnswerverifiedE

A person's net worth is computed by

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

A personal cash flow statement can serve as the basis for the budget categories used by an individual or family.

Correct AnswerverifiedTrue

The payment items that should be budgeted first are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A person's lifestyle is a reflection of his or her values,goals,career,and family situation.

Correct AnswerverifiedShow Answer

A home file should be used for:

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

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E

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A

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True

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