Multiple Choice
Identify the choice that best completes the
statement or answers the question.
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1.
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A type of financial statement which reports what a person or family owns as well
as owes is
a. | a cash flow statement. | c. | a balance sheet. | b. | a capital statement. | d. | an income
statement. |
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2.
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The day-to-day financial activities associated with using limited income to
satisfy your unlimited needs and wants is
a. | discretionary income. | c. | expenditures. | b. | net income. | d. | money
management. |
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3.
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Actual spending that is greater than planned spending is a
a. | budget variance. | c. | budget. | b. | deficit. | d. | fixed expenses. |
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4.
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People who help you develop your financial plan are
a. | independent agents. | c. | financial representatives. | b. | security
salespeople. | d. | financial
planners. |
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5.
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The two common financial statements used in money management are
a. | the budget & income statement. | b. | the balance sheet & income
statement. | c. | the balance sheet & cash flow statement. | d. | the budget &
balance sheet. |
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6.
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The accumulation and management of property during one’s lifetime and the
distribution of one’s property at death is
a. | an income statement. | c. | financial planning. | b. | estate planning. | d. | an owner’s equity
statement. |
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7.
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Evaluating one’s financial position, setting financial goals, and guiding
activities and resources toward reaching those goals is
a. | an income statement. | c. | financial planning. | b. | estate planning. | d. | an owner’s equity
statement. |
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8.
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A report that summarizes current financial condition, acknowledges financial
needs, and sets a direction for future financial activities is
a. | an income statement. | c. | a balance sheet. | b. | a financial plan. | d. | an owner’s equity
statement. |
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9.
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A good budget
a. | must be realistic. | c. | should have a simple format. | b. | should be
flexible. | d. | all the
above. |
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10.
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Insurance is available to provide an income to those who fear the two most
common causes of loss of income, which are
a. | automobile accidents and sports injuries. | b. | disability and
accidents. | c. | disability and unemployment. | d. | unemployment and natural
disasters. |
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11.
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The part of the Social Security insurance system that provides pensions to
retired workers and their families, death benefits to dependents of workers who die, and benefits to
disabled workers and their families is
a. | retirement, survivors, and disability insurance. | b. | unemployment
insurance. | c. | a pension. | d. | an annuity. |
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12.
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Items of value are
a. | owner’s equity. | c. | assets. | b. | liabilities. | d. | net worth. |
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13.
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A statement that reports net wages and other income along with spending for a
given period of time, such as for a month, is
a. | a cash flow statement. | c. | a balance sheet. | b. | a capital statement. | d. | an income
statement. |
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14.
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The difference between what a person owns and owes is
a. | owner’s equity. | c. | assets. | b. | liabilities. | d. | an income
statement. |
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15.
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The first component that should be planned for in a budget is
a. | variable expenses. | c. | savings. | b. | fixed expenses. | d. | living
expenses. |
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