Finance Quize

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1. What is the purpose of a budget in personal finance?

• A. To keep track of expenses so you can spend more.

• B. To control and manage income and expenses, helping to save and avoid debt.

• C. To set spending limits for groceries.

• D. To calculate your net worth.

2. What is an Emergency Fund?

• A. Money set aside to pay for vacations.

• B. A fund reserved to cover unexpected expenses or financial emergencies.

• C. A savings account you use for buying gifts.

• D. The fund you use to pay taxes.

3. What is the difference between gross income and net income?

• A. Gross income is the total amount earned before taxes; net income is what's left after taxes and deductions.

• B. Gross income is what you earn after taxes; net income is before deductions.

• C. Gross income includes only salary; net income includes salary and investments.

• D. Gross income is your total assets; net income is your total liabilities.

4. What does 'liquidity' mean in finance?

• A. The ability to convert assets into cash quickly without losing value.

• B. How much water a company has in its inventory.

• C. The amount of credit available for a business.

• D. The interest rate you pay on loans.

5. What does working capital represent in a business?

• A. The total revenue of a company.

• B. The amount of cash available to cover day-to-day expenses.

• C. The company’s long-term debt.

• D. The value of the company's assets.