Chapter 4 Financial Decisions and Planning

Front

Wealth is measured on the personal net worth statement.

Back

True

Front

A personal net worth statement lists income and expenses.

Back

False

Front

A trade-off is the value of what you are giving up when you make a purchase.

Back

True

Front

Preparing a budget is a simple six-step process.

Back

True

Front

A favorable variance occurs when you earn or save more than you estimated or spend less than you planned.

Back

True

Front

Financial planning is a formal process that involves carefully examining your current financial situation and thinking about your future.

Back

True

Front

Doing without an item you would like to buy now in order to save money to fulfill an intermediate or a long-term goal is an example of delayed gratification.

Back

True

Front

Which of the following is an example of a luxury item? food, medical care, more than one pair of shoes, sports cars

Back

sports cars

Front

If your cash inflows exceed your cash outflows for a period of time, you have

Back

net income

Front

Which of the following is NOT listed on a personal net worth statement?
assets, liabilities, net worth

Back

income