Test Bank for Personal Finance 7Th Canadian edition By Kapoor

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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: EasyLearning Objective: 02-03 Develop a personal balance sheet and cash flow statement.Topic: 02-05 Personal Financial Statements for Measuring Financial Sustainability