WorksheetsChapter 4 Financial Decisions and Planning
Total questions: 30
Worksheet time: 15mins
Wealth is measured on the personal net worth statement.
True
False
A personal net worth statement lists income and expenses.
True
False
A trade-off is the value of what you are giving up when you make a purchase.
True
False
Preparing a budget is a simple four-step process.
True
False
A favorable variance occurs when you earn or save more than you estimated or spend less than you planned.
True
False
Financial planning is a formal process that involves carefully examining your current financial situation and thinking about your future.
True
False
Doing without an item you would like to buy now in order to save money to fulfill an intermediate or a long-term goal is an example of delayed gratification.
True
False
Which of the following is an example of a luxury item?
food
medical care
more than one pair of shoes
sports cars
If your cash inflows exceed your cash outflows for a period of time, you have
net loss
wealth
net income
net worth
Which of the following is NOT listed on a personal net worth statement?
income
assets
liabilities
net worth
The first step of the decision-making model used in helping to make financial decisions is to
compare choices
gather information
define the problem or goal
develop benchmarks
Which of the following is an example of a fixed expense?
food
rent
utilities
entertainment
Which of the following is an example of a variable expense?
rent
food, utilities
insurance
car payment
Which of the following is an example of a short-term goal?
increase your yearly income within two years
save money for retirement
save money to buy a car
add $200 to your savings account by the end of the year
Which of the following financial professionals is likely to publish self-help materials?
financial planner
financial adviser
financial expert
investment adviser
The amount of money that a person has to spend after needs are met is called discretionary income.
True
False
A budget lists actual income and expenses to help create a financial plan.
True
False
The pay-yourself-first approach involves putting money into savings before you consider other expenses.
True
False
Keeping good records will help you prepare a better budget.
True
False
Financial planners usually receive a fee for their consulting services.
True
False
When creating a financial plan, financial goals should be set before personal goals
True
False
The first step in preparing a budget is to
plan savings
estimate income
estimate expenses
gather information
The value of your next best option-what you are giving up
opportunity cost
cash inflows
cash outflows
charitable giving
Money and items of value that you own
assets
financial plan
indentity theft
timeline
A spending and saving plan based on expected income and expenses
budget
encyption
electronic records
benchmarks
Plans for how you will pay for your personal goals
financial goals
financial planner
net worth
personal goals
Costs that do not change each month
fixed expenses
variable expenses
wants
needs
Costs that can go up and down each month
variable expenses
fixed expenses
needs
wants
Things needed for survival, such as food, water, clothing, shelter, and medical care
needs
wants
net worth
liabilities
A common Internet scam that uses email messages to deceive you
phishing
identity theft
needs
variances
