Question 1

Suppose that you wanted to calculate a financial ratio to measure your liquidity. You would most likely use the ________ ratio.

Accepted Answer

A)   debt
B)   long-term debt coverage
C)   savings
D)   current
E)   none of the aboveF) A) and E)
G) B) and E)

Question 2

One's ________ is found by dividing total debt or liabilities by total assets.

Accepted Answer

A)   Debt ratio
B)   Current ratio
C)   Net worth
D)   Asset ratio
E)   none of the aboveF) A) and B)
G) A) and C)

Question 3

An expenditure that you can control over time and that you can manage is a(n)

Accepted Answer

A)   variable expenditure.
B)   fixed expenditure.
C)   constant expenditure.
D)   short-term expenditure.
E)   adjustable expenditure.F) None of the above
G) A) and B)

Question 4

Does how you use debt effect your net worth?

Accepted Answer

Yes, it depends on what you use your cre...

Question 5

Insolvency results from taking in more than you consume financially.

Accepted Answer

A) True 
 B)False

Question 6

The experts say that, stereotypically, a fee only financial planner is a better option than one who earns commissions on what they sell you. Why is this sometimes true?

Accepted Answer

Because of the Agency relationship and s...

Question 7

Hector and Maria Montez are trying to figure out their current financial health. They have listed the following items from their most recent statements. They will pay off their car loan in three years. Their gross household income is $3,800 per month. They receive $75 month in interest income from their investments.
Savings account: $1,200
Checking account: $800
Credit card balance: $1,000
Car loan balance: $12,000
Car market value: $8,000
Furniture; market value: $2,000
Stocks and bonds: $10,000
-What is their debt ratio?

Accepted Answer

A)   169 percent
B)   1.69 times
C)   0.59 percent
D)   0.59 times
E)   2 timesF) B) and D)
G) All of the above

Question 8

Having negative net income every once in a while is not such a bad thing as long as you have planned for it.

Accepted Answer

A) True 
 B)False

Question 9

When measuring your current financial condition it is important to create

Accepted Answer

A)   positive net worth.
B)   a personal balance sheet.
C)   an income statement.
D)   positive net income.
E)   both B and C are required.F) C) and D)
G) B) and C)

Question 10

List the benefits a professional financial planner can offer.

Accepted Answer

A financial planner has the knowledge an...

Question 11

If your liabilities are greater than the value of your assets you are considered

Accepted Answer

A)   unstable.
B)   bankrupt.
C)   insolvent.
D)   unbalanced.E) All of the above
F) C) and D)

Question 12

Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios?

Accepted Answer

A)   current ratio
B)   debt ratio
C)   savings ratio
D)   total asset turnover
E)   none of the aboveF) C) and D)
G) B) and D)

Question 13

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

Accepted Answer

A)   liability ratio
B)   debt ratio
C)   long-term debt coverage ratio
D)   current ratio
E)   none of the aboveF) A) and D)
G) C) and D)

Question 14

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step?

Accepted Answer

A)   Separate your personal finances from the business finances.
B)   Include your personal finances with the business finances to save time.
C)   Rent a separate office for your business activities.
D)   Purchase a software program to handle both your business and personal finance at the same time.E) B) and C)
F) A) and D)

Question 15

Practical uses of an income statement include

Accepted Answer

A)   determining whether you are earning more than you spend.
B)   spotting problem areas of overspending.
C)   determining if money is available for saving or investment.
D)   knowing where your money is going.
E)   all of the aboveF) C) and E)
G) A) and B)

Question 16

Tell how to implement the "envelope" budgeting system.

Accepted Answer

For those new to budgeting or those with...

Question 17

When including an asset like a car on your balance sheet

Accepted Answer

A)   list its value as given in a blue book or site like www.edmunds.com.
B)   list the original purchase price of the vehicle.
C)   list the amount it would cost to purchase a new model of this vehicle.
D)   none of the aboveE) C) and D)
F) B) and D)

Question 18

The current ratio is a measure of liquidity. What information does it tell you?

Accepted Answer

A)   It tells you how many current assets you own free and clear.
B)   It tells you how much your debt payments for the current period are.
C)   It tells you how many times you can pay off your current liabilities by using your liquid assets.
D)   It tells you what portion of your total liabilities are current liabilities.E) All of the above
F) B) and C)

Question 19

To determine your level of net worth, subtract your liabilities from your positive net equity.

Accepted Answer

A) True 
 B)False

Question 20

Below are several people and their current ratios. If they were to lose their jobs today, which one would have more time and more choices until they find their next job?

Accepted Answer

A)   Sally has a current ratio of 0.85 times.
B)   Leroy has a current ratio of 2.5 times.
C)   Bob has a current ratio of 1 time.
D)   There is not enough information to answer this question.E) None of the above
F) A) and B)

Exam 2: Measuring Your Financial Health and Making a Plan

One's ________ is found by dividing total debt or liabilities by total assets.

Correct Answer
verified

Correct Answer
verified

Suppose that you wanted to calculate a financial ratio to measure your liquidity. You would most likely use the ________ ratio.

Correct Answer
verified

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step?

Correct Answer
verified

Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios?

Correct Answer
verified

Practical uses of an income statement include

Correct Answer
verified

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

Correct Answer
verified

Does how you use debt effect your net worth?

Correct Answer
verified
Yes, it depends on what you use your cre...
View Answer

If your liabilities are greater than the value of your assets you are considered

Correct Answer
verified

When measuring your current financial condition it is important to create

Correct Answer
verified

List the benefits a professional financial planner can offer.

Correct Answer
verified
A financial planner has the knowledge an...
View Answer

Tell how to implement the "envelope" budgeting system.

Correct Answer
verified
For those new to budgeting or those with...
View Answer

An expenditure that you can control over time and that you can manage is a(n)

Correct Answer
verified

The experts say that, stereotypically, a fee only financial planner is a better option than one who earns commissions on what they sell you. Why is this sometimes true?

Correct Answer
verified
Because of the Agency relationship and s...
View Answer

Below are several people and their current ratios. If they were to lose their jobs today, which one would have more time and more choices until they find their next job?

Correct Answer
verified

Insolvency results from taking in more than you consume financially.

Correct Answer
verified

To determine your level of net worth, subtract your liabilities from your positive net equity.

Correct Answer
verified

Having negative net income every once in a while is not such a bad thing as long as you have planned for it.

Correct Answer
verified

When including an asset like a car on your balance sheet

Correct Answer
verified

The current ratio is a measure of liquidity. What information does it tell you?

Correct Answer
verified

Exam 2: Measuring Your Financial Health and Making a Plan

One's ________ is found by dividing total debt or liabilities by total assets.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that you wanted to calculate a financial ratio to measure your liquidity. You would most likely use the ________ ratio.

Correct AnswerverifiedShow Answer

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step?

Correct AnswerverifiedShow Answer

Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios?

Correct AnswerverifiedShow Answer

Practical uses of an income statement include

Correct AnswerverifiedShow Answer

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

Correct AnswerverifiedShow Answer

Does how you use debt effect your net worth?

Correct AnswerverifiedYes, it depends on what you use your cre...View AnswerShow Answer

If your liabilities are greater than the value of your assets you are considered

Correct AnswerverifiedShow Answer

When measuring your current financial condition it is important to create

Correct AnswerverifiedShow Answer

List the benefits a professional financial planner can offer.

Correct AnswerverifiedA financial planner has the knowledge an...View AnswerShow Answer

Tell how to implement the "envelope" budgeting system.

Correct AnswerverifiedFor those new to budgeting or those with...View AnswerShow Answer

An expenditure that you can control over time and that you can manage is a(n)

Correct AnswerverifiedShow Answer

The experts say that, stereotypically, a fee only financial planner is a better option than one who earns commissions on what they sell you. Why is this sometimes true?

Correct AnswerverifiedBecause of the Agency relationship and s...View AnswerShow Answer

Below are several people and their current ratios. If they were to lose their jobs today, which one would have more time and more choices until they find their next job?

Correct AnswerverifiedShow Answer

Insolvency results from taking in more than you consume financially.

Correct AnswerverifiedShow Answer

To determine your level of net worth, subtract your liabilities from your positive net equity.

Correct AnswerverifiedShow Answer

Having negative net income every once in a while is not such a bad thing as long as you have planned for it.

Correct AnswerverifiedShow Answer

When including an asset like a car on your balance sheet

Correct AnswerverifiedShow Answer

The current ratio is a measure of liquidity. What information does it tell you?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Yes, it depends on what you use your cre...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A financial planner has the knowledge an...
View Answer

Correct Answer
verified
For those new to budgeting or those with...
View Answer

Correct Answer
verified

Correct Answer
verified
Because of the Agency relationship and s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified