Ch. 16 Pre-Quiz

Savings accounts and a home are examples of

• liabilities

• assets

• net worth

• cash outflow

A payment for rent represents

• a cash inflow

• a cash outflow

• a liability

• an asset

True or False. Retirement planning is usually considered a short-term goal.

• True

• False

A major purpose of a budget is to

• assist with comparison shopping

• achieve financial goals

• reduce a person's enjoyment of life

• gather data for using credit cards

The most uncertain aspect of the budgeting process

• estimating variable expenses

• determining net worth

• estimating fixed expenses

• setting financial goals

A common source of retirement income is

• disability income insurance

• a mortgage

• pensions

• unemployment insurance

A long-term financial goal usually involves

• less than two years

• buying with a credit card

• using the services of a financial planner

• saving over many years

Which of the following is a fixed expense?

• Food

• Utilities

• Rent

• Clothing

Setting financial goals is the ____ step in creating and using a budget.

• First

• Second

• Third

• Final

An effective budget should be

• Realistic

• Flexible

• Evaluated regularly

• All of the above