Financial Assessment Quiz

What is net worth?

• The amount of debt owed

• The value of personal property

• The total income earned in a year

• The difference between assets and liabilities

Why is knowing net worth important for individuals?

• To assess the value of personal property

• To evaluate streams of income

• To determine current income and expenses

• To measure progress towards financial goals

Which of the following is an example of an asset?

• Student loans

• Credit card balance

• Car loan

• Money in a bank account

What is a personal asset inventory used for?

• To evaluate personal expenses

• To calculate net worth

• To track financial progress

• To determine insurance coverage

What are liquid assets?

• Assets that decrease in value over time

• Assets that can be easily converted to cash

• Assets that provide a return on investment

• Assets that are restricted in use

Which type of asset generally increases in value over time?

• Liquid assets

• Restricted assets

• Depreciating assets

• Appreciating assets

What are liabilities?

• Debts owed by an individual

• Assets that provide a return on investment

• Personal property owned by an individual

• Assets that can be easily converted to cash

When should debt be used?

• To purchase depreciating assets

• To pay off credit card balances

• To purchase appreciating assets

• To buy personal property

How can net worth be calculated?

• By adding income and expenses

• By subtracting liabilities from assets

• By determining the value of personal property

• By evaluating streams of income

What is an example of a bad debt?

• A car loan

• Student loans

• A mortgage

• Credit card balances from eating out