Component one quiz

What is Budgeting?

• The process of tracking past expenses.

• The process of forecasting future expenses and income.

• The act of saving money without planning.

• The process of spending without limits.

What are Assets?

• Expenses incurred during a month.

• Any form of debt or liability.

• Only cash and bank balances.

• Anything owned, such as cars, motorcycles, and homes.

What are Liabilities?

• What we owe, or our debt.

• Assets we own, like cars and homes.

• Income we earn from work.

• Savings and investments.

What is Net Worth?

• The difference between assets and liabilities.

• The difference between budgeting and equity.

• The amount spent on expenses.

• The total cash available at hand.

What is Equity?

• The total amount of debt we owe.

• The total value of all our assets.

• The amount of a specific asset that we own after subtracting any liabilities.

• The amount of money saved in a bank account.

What is Income?

• The total value of assets owned.

• Money coming in through wages earned, an allowance, or other sources.

• Money spent on bills and expenses.

• The amount of debt owed to creditors.

What is the third step in creating a budget?

• Creating a savings plan.

• Determining your net worth.

• Setting long-term financial goals.

• Identifying your expenses.

A key factor in shaping a budget is understanding your income.

• True

• False

What may impact your budget according to Step 4?

• Income taxes.

• Savings account.

• Investment strategies.

• Credit scores.

_____________ is the first step in creating a budget.