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WorksheetsThe Art of Budgeting
Total questions: 57
Worksheet time: 3hrs 51mins
Name
Class
Date
1.
For a budget to work, money coming in (income) must equal money going out (expenses).
a)
True
b)
False
2.
Rent/mortgage payment
a)
Fixed Expense
b)
Variable Expense
3.
Which one of the following is not a benefit of budgeting?
a)
It facilitates the coordination of activities.
b)
It provides definite objectives for evaluating performance.
c)
It provides assurance that the company will achieve its objectives.
d)
It requires all levels of management to plan ahead on a recurring basis.
4.
Why are budgets useful in the planning process?
a)
They provide management with information about the company's past performance.
b)
They help communicate goals and provide a basis for evaluation.
c)
They guarantee the company will be profitable if it meets its objectives.
d)
They enable the budget committee to earn their paycheck.
5.
A common starting point in the budgeting process is
a)
expected future net income.
b)
past performance.
c)
to motivate the sales force.
d)
a clean slate, with no expectations.
6.
If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
a)
350,000 pounds
b)
530,000 pounds
c)
290,000 pounds
d)
470,000 pounds
7.
Pell Manufacturing is preparing its direct labor budget for May. Projections for the month are that 33,400 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?
a)
1,159,200.
b)
1,180,800
c)
1,202,400.
d)
1,296,000.
8.
A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected.
Budgeted credit sales were:
January $360,000
February 216,000
March 540,000
The cash inflow in the month of March is expected to be
Budgeted credit sales were:
January $360,000
February 216,000
March 540,000
The cash inflow in the month of March is expected to be
a)
$406,800.
b)
$307,800.
c)
$324,000.
d)
$388,800.
9.
If an expense can NOT be removed from your budget to save money, it is considered a _____.
a)
Income
b)
Want
c)
Need
d)
Savings
10.
Budgeting is crucial to your financial success.
a)
True
b)
False
11.
Examples of Fixed Expenses include:
a)
Mortgage, loans, rent
b)
Cable, entertainment, food
c)
Gas, food, phone
d)
Clothing, gas, food
12.
Fixed or variable expense: Groceries
a)
Fixed
b)
Variable
13.
A financial plan is called a
a)
budget
b)
tax
c)
allowance
d)
income
14.
If an expense can be cut from your budget to save money, it is considered a ______.
a)
want
b)
need
c)
income
d)
savings
15.
A 9th grader makes and sells earrings as a way to earn extra money. The money she gets is considered _______.
a)
income
b)
needs
c)
outflow
d)
wants
16.
Of all the choices, which one should you budget for first?
a)
Groceries
b)
Entertainment
c)
Cell Phone Bill
d)
New Car
17.
NSF stands for
a)
non satisfactory financing
b)
not saving fully
c)
non sufficient funds
d)
non surplus funds
18.
Assets - Liabilities =
a)
Net Worth
b)
Share
c)
insolvent
d)
personal inventory
19.
What is the first rule of financial literacy?
a)
Spend your money - you earned it.
b)
Always put your money in a safe place.
c)
Never lend money to friends.
d)
Pay yourself first.
20.
Which of the following are reasons to create a budget? You may select more than one response.
a)
Plan for a financial goal.
b)
Be able to spend all your money.
c)
Help pay off debt.
21.
Which of the following is NOT a need?
a)
Food
b)
Clothes
c)
Netflix
d)
Shelther
22.
Which of the following is an example of a variable expense
a)
Food
b)
Rent
c)
Car payment
d)
Student loan
23.
Your emergency savings fund should have how many months worth of income?
a)
1-2 months
b)
10 months
c)
It doesn't matter
d)
3-6 months
24.
What is the first step in budgeting?
a)
Record what you spend
b)
Estimate your income
c)
Set financial goals
d)
Review and evaluate monthly
25.
What is a discretionary Income?
a)
an estimate of income and exponditure for a set period of time.
b)
a corporate expense that varries with production output.
c)
Income remaining after deduction of taxes, other mandatory charges.
d)
cannot avoid or help doing something.
26.
Which of the following is an example of a "life change" that would effect your budget?
a)
marriage
b)
children
c)
change in job
d)
all of these
27.
Why do you want to have savings?
a)
financial emergencies
b)
exciting financial opportunties
c)
financial security
d)
all of these
28.
What percentage is recommended for savings?
a)
5%
b)
10%
c)
20%
d)
15%
29.
What are your liabilities?
a)
things you own
b)
money you have in the bank
c)
money you owe others
d)
the excuses you have for not meeting your budget
30.
Why is budgeting important?
a)
It's good to live pay check to paycheck
b)
You should always live at your parents house
c)
You might get into a house or other large expense you can’t afford
d)
Always spend more than you can afford
31.
A plan for your estimated income, expenses, and savings.
a)
Credit Rating
b)
Budget
c)
Bankruptcy
d)
Financial Goals
32.
What does the "M" in SMART stand for?
a)
Mental - you have to be able to think about the goal.
b)
Measurable - a goal must have some kind of number attached so you have a way to know if you are reaching the goal.
c)
Memorable - a goal must be easily remembered
d)
Maximum - there are no limits for goals
33.
What does the "S" in SMART stand for?
a)
Simple - a goal must be easy.
b)
Smart- a goal must make sense.
c)
Specific - a goal must be focused.
d)
Sample - a goal must be typical.
34.
What does the "T" in SMART stand for?
a)
Time-bound - the goal must be reached within a specific length of time.
b)
Thoughtful - a goal must take into account the feelings of others.
c)
Transferable - a goal should be able to be shared with other people.
d)
Trust-worthy - a goal should be worthy.
35.
Something that is nice to have but not necessary is a
a)
need
b)
want
c)
value
d)
option
36.
Which one of these is NOT a necessity in order to survive?
a)
Food
b)
Water
c)
Sunglasses
d)
Electricity
37.
Which SMART Goal component is the following: Austin will save $600.
a)
S
b)
M
c)
A
d)
R
38.
Which SMART Goal component is the following: Austin will save money for the next two years.
a)
M
b)
A
c)
R
d)
T
39.
If expenses were to exceed income on a spending plan, what would be a financially smart solution?
a)
Earn less income
b)
Decrease expenses
c)
Increase purchases
d)
Use a credit card more often
40.
What is the ¨S¨ in SMART Goal?
a)
Small
b)
Separate
c)
Specific
d)
Silly
41.
A person's debt ration shows the relationship between debt and net worth (liabilities/assets). The lower the ratio, the
a)
Better off financially the person is
b)
Worse off financially the person is
c)
More cash the person has
d)
Less cash the person has
42.
Which of the following is not part of the Financial Planning process
a)
Set a Goal
b)
Analyze the situation
c)
PYF
d)
Create a budget
43.
Jill decides to drive to work instead of taking the bus. It takes her 90 minutes to get there and the bus ride would have been 40.
What type of analysis does this question represent?
What type of analysis does this question represent?
a)
Opportunity Cost Analysis
b)
Cost-benefit Analysis
c)
Marginal Analysis
d)
Discretionary Analysis
44.
A record of income and spending and a plan for managing money.
a)
Discretionary Income
b)
Expenditures
c)
Budget
45.
Money available to spend on goods and services that are not essential.
a)
Discretionary Income
b)
Expenditures
c)
Budget
46.
Expenses that do not change from month to month, such as auto insurance or rent.
a)
Variable Expenses
b)
Fixed Expenses
47.
Expenses that vary from month to month, such as entertainment, car repairs, or doctor bills.
a)
Variable Expenses
b)
Fixed Expenses
48.
Expenses that vary from month to month, such as entertainment, car repairs, or doctor bills.
a)
Variable Expenses
b)
Fixed Expenses
49.
Making a purchase based on an immediate want or due to the pressure of advertising is considered Impulse Buying.
a)
True
b)
False
50.
Goods or services that people cannot survive without, such as water, food, shelter and clothing.
a)
Needs
b)
Wants
51.
Goods or services that make people more comfortable or content, but which are not necessary for survival.
a)
Needs
b)
Wants
52.
The next best alternative given up when making a financial choice.
a)
Scarcity
b)
Opportunity Cost
53.
The economic condition of limited resources that prevents people from having everything they want.
a)
Scarcity
b)
Opportunity Cost
54.
What is a need?
a)
Bottle of Soda
b)
Dr. Appointment
c)
Netflix
d)
Concert tickets
55.
What is the fund for unexpected expenses.
a)
budget
b)
saving for goal
c)
30% of budget
d)
emergency fund
56.
Keeping your budget will keep you ____________ for your goals.
a)
on track
b)
distracted from
c)
annoyed about thinking
d)
off track
57.
Keeping your budget will keep you ____________ for your goals.
a)
on track
b)
distracted from
c)
annoyed about thinking
d)
off track
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