PF Chapter 4 Test Review

The two elements to consider in budgeting and planning are your income and your expenses.

• True

• False

When assets are greater than liabilities, you are said to be solvent.

• True

• False

A net worth statement will be useful when you apply for a loan or credit.

• True

• False

You should never sign a contract until you read and understand all its terms.

• True

• False

A balanced budget, ____________.

• expenses - savings = gross income

• expenses = savings

• expenses + savings = earnings + borrowing

Which of the following is a fixed expense?

• insurance premium

• a checking account

• grocery bill

When one person makes an offer and another person changes it, the second person is __________.

• committing fraud

• entering into an agreement

• making a counter offer

A person who creates and signs the promissory note and agrees to pay it on a certain date is called the ___________.

• co-signer

• maker

• payee

A computer program that organizes data in columns and rows and can perform calculations using the data is called a _________.

• database

• spreadsheet

• calculator

Groceries is an example of a ________ expense.

• fixed

• variable