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WorksheetsFIN533 : CHAPTER 2 - FINANCIAL STATEMENTS AND BUDGETING
Total questions: 25
Worksheet time: 15mins
1. A balance sheet is also known as:
A. Cash Flow Report
B. Net Worth Statement
C. Income Statement
D. Budget Plan
2. The formula for Net Worth is:
A. Assets + Liabilities
B. Liabilities - Assets
C. Assets - Liabilities
D. Income - Expenses
3. Which of the following is NOT a liquid assets?
A. Savings account
B. Cash in hand
C. Real estate
D. Stocks
4. A Cash Flow Statement is also called a:
A. Net Worth Report
B. Statement of Liabilities
C. Statement of Assets
D. Income & Expenditure Statement
5. When expenses are higher than income, the result is:
A. Surplus
B. Deficit
C. Profit
D. Balance
6. The main purpose of budgeting is to:
A. Calculate net worth
B. Control and plan spending
C. Reduce liabilities
D. Prepare tax forms
7. Which of the following is a current liability?
A. 15-year mortgage loan
B. Fixed deposit
C. Investment in shares
D. Outstanding credit card bill
8. The Current Ratio measures:
A. Long-term debts vs assets
B. Value of fixed assets
C. Level of monthly savings
D. Ability to pay short-term obligations
9. A healthy Current Ratio should be at least:
A. 0.5
B. 1.0
C. 5.0
D. 0.8
10. Debt Ratio is calculated using:
A. Liabilities / Assets
B. Assets / Liabilities
C. Expenses / Income
D. Savings / Take-home pay
11. An example of a fixed expense is:
A. Food & groceries
B. Car loan installment
C. Clothing
D. Entertainment
12. A healthy Debt Ratio should be:
A. Below 50%
B. 60-80%
C. Around 90%
D. More than 100%
13. Ali earns RM3,500 take-home pay each month. He has liquid assets of RM7,000 and current liabilities of RM5,000.
What is his Current Ratio and his short-term financial position considered healthy?
A. 0.7 - Not healthy
B. 1.0 Acceptable
C. 1.4 Healthy
D. 2.0 Very strong
14. Maria's annual take-home pay is RM48,000. She manages to save RM9,600 each year.
What is her Savings Ratio and does it meet the recommended benchmark?
A. 10% - Meets benchmark
B. 15% - Below benchmark
C. 20% - Ideal
D. 5% - Too low
15. Rahman has total assets worth RM250,000 and total liabilities of RM100,000. His annual take-home pay is RM60,000 and his yearly loan installments total RM30,000.
Which statement is correct about his financial health?
A. Debt Ratio is 40% and DSCR = 2.0, both considered healthy
B. Debt Ratio is 60% and DSCR = 1.0, both risky
C. Debt Ratio is 50% and DSCR = 3.0, very healthy
D. Debt Ratio is 30% and DSCR = 1.5 acceptable
16. Insolvency happens when liabilities are greater than assets.
True
False
17. A Cash Flow Statement shows financial position at a single point in time.
True
False
18. A good budget shoul be realistic, flexible and clearly communicated.
True
False
19. Personal financial ratios can help individuals measure their financial health.
True
False
20. Keeping financial records is unnecessary as long as you have online banking access.
True
False
The formula for Net Worth is: Assets - (a) . (Expenses, Liabilities, Savings, Income)
22. A budget is also known as a (a) plan. (Spending, Investment, Growth, Insurance)
23. A Cash Flow Statement shows cash inflows and (a) during a specific period. (Profit, Outflows, Assets, Liabilities)
24. The recommended emergency fund should cover at least _____ to _____ months of expenses> (1 to 2, 3 to 6, 6 to 12, 12 to 24)
(a)
25. The ratio that measures the ability to repay debt using take-home pay is called the (a) . (Current Ratio, Savings Ratio, Debt Service Coverage Ratio(DSCR), Debt Ratio)
