Chapter 04 - Budgets and Records

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

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A set of goals for spending, saving, and investing the money you receive is called a budget.

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Before you prepare a budget, it is a good idea to keep track of your income and expenses for a month or two.

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You should always create a monthly budget—weekly or biweekly budgets tend to be inaccurate.

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In the short-run, fixed costs are easier to change than variable costs.

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

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

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An express contract is legally binding, but an implied contract is not.

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If a person signs a contract because he or she felt threatened to do so, a genuine agreement does not exist.

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A court will not require a person to perform an agreed-upon act if it is illegal.

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• False