WorksheetsChapter 4 Test - Finance
Total questions: 35
Worksheet time: 27mins
The two elements to consider in budgeting and planning are your income and your expenses.
True
False
A set of goals for spending, saving, and investing the money you receive is called a budget.
True
False
Before you prepare a budget, it is a good idea to keep track of your income and expenses for a month or two.
True
False
You should always create a monthly budget—weekly or biweekly budgets tend to be inaccurate.
True
False
In the short-run, fixed costs are easier to change than variable costs.
True
False
When assets are greater than liabilities, you are said to be solvent.
True
False
A net worth statement will be useful when you apply for a loan or credit.
True
False
An express contract is legally binding, but an implied contract is not.
True
False
If a person signs a contract because he or she felt threatened to do so, a genuine agreement does not exist.
True
False
A court will not require a person to perform an agreed-upon act if it is illegal.
True
False
The competence or legal ability of a person to enter a contract is called consideration.
True
False
You should never sign a contract until you read and understand all its terms.
True
False
A payee is a person who promises to pay the debt of another person.
True
False
Only people with considerable wealth need to create a personal record keeping system.
True
False
One big advantage of computerized record keeping is that information can be updated quickly and easily.
True
False
When preparing a budget, you need to focus mostly on your
disposable income
net income.
gross income.
taxable income.
Most financial experts recommend that a family have fixed expenses of no more than
50 percent of gross pay or 60 percent of net pay, whichever is higher.
50 to 60 percent of net pay.
50 to 60 percent of variable expenses
50 to 60 percent of gross pay.
Which of the following is a variable expense?
insurance premium
rent
car loan
grocery bill
Which of the following would be considered an asset?
a car loan
a checking account
a credit card account
all of the above are assets
The IRS has the legal right to audit your tax returns and supporting records for ___ years from the date of filing.
10
3
2
5
When one person makes an offer and another person changes it, the second person is
entering into an agreement.
committing fraud.
making a counteroffer.
providing consideration.
A person who creates and signs the promissory note and agrees to pay it on a certain date is called the
negotiator
co-signer.
payee.
maker.
A computer program that organizes data in columns and rows and can perform calculations using the data is called a
spreadsheet
scheduler
database
calculator
Your (a) income is the money you have left to spend or save after taxes and other required deductions are taken.
A spending and saving plan based on your expected income and expenses is called a(n) (a) .
(a) expenses are costs that do not change from month to month.
(a) expenses are costs that vary in amount and type, depending on the choices you make.
Money or debts you owe to others are called (a) .
Assets minus liabilities equals ___ _____.
(a)
A legally enforceable agreement between two or more people is called a(n) (a) .
Something of value exchanged for something else of value is called (a) .
A(n) (a) or guarantee is a statement assuring quality and performance of a product or service.
Use the following figures to find Barney’s income for June:
Part-time job salary (after taxes): $300
Allowance for household chores: $25
Birthday check from parents: $25
Savings: $100
Cost of new shirt and pants: $80
Cost of two movies: $20
Cost of daily lunches: $100
The Girard family decides to save 10 percent of their income each month. If their monthly income is $4,000, how much will they save over the course of one year?
Sales tax in your community is 6 percent. If you go to a sporting goods store and buy a soccer ball for $19.95, socks for $5.95, and a headband for $10.00, what amount will you pay once the sales tax is added to your purchase?
