16.1 personal financial statements

Question 1

assets - liabilites = _______

Answer 1

net worth (owner’s equity)

Question 2

savings accounts and a home are examples of

• liabilities
• assets
• net worth
• cash outflow

Answer 2

assets

Question 3

the amount of money that could be claimed if all assets were sold for cash and all debts were paid off

Answer 3

net worth

Question 4

What is the first part of a cash flow statement?

Answer 4

cash inflows / income

Question 5

a listing of a person or family’s ____ is the second items on a balance sheet

Answer 5

liabilities

Question 6

if you set ____, make wise decisions, buy wisely, and live within your income, you will be a successful money manager

Answer 6

if you set goal, make wise decisions, buy wisely, and live within your income, you will be a successful money manager

Question 7

a family has $189,000 in assets and $87,000 in debts. What is their net worth?

Answer 7

$102,000

Question 8

money management involves getting the most for your money through _____ planning

Answer 8

money management involves getting the most for your money through careful planning

Question 9

what are some examples of cash outflows?

Answer 9

• rent
• mortgage payment
• food
• clothing
• utilities
• telephone
• transportation
• personal care
• recreation/entertainment

Question 10

_____ ahead and deciding what is important will help you have money for things you enjoy

Answer 10

planning ahead and deciding what is important will help you have money for things you enjoy

Question 11

give some examples of cash inflows

Answer 11

• net income / take home pay
• interest income
• rental income

Question 12

if you spent less than you had in income then…..

Answer 12

you have an increase in your net worth, this extra money most likely will be kept in your savings account for the future

Question 13

what do cash outflows represent?

Answer 13

money paid out by a person or family during a specific period, normally a month

Question 14

What reports what a person or family owns as well as owes?

Answer 14

balance sheet

Question 15

calculate

assets: ______
liabilities: $5,600

net worth: $67,800

Answer 15

assets = $73,400

67800+5600=73400

Question 16

how much time does a cash flow statement cover?

Answer 16

usually a month

Question 17

According to the Bureau of the Census, what are the main assets in US households?

Answer 17

• motor vehicles
• homes
• savings accounts
• US savings bond
• certificates of deposit
• mutual funds
• stocks
• corporate bonds
• retirement accounts

Question 18

keeping track of how much is ____ on living expenses will help you plan and control your spending

Answer 18

keeping track of how much is spent on living expenses will help you plan and control your spending

Question 19

calculate:

assets: $7,000
liabilities: $1,800

net worth: _______

Answer 19

$5,200

7000-1800=5200

Question 20

if you spent more than you had in income then….

Answer 20

you either had to use some of your savings or credit to pay the additional expenses

Question 21

amounts owed to others

Answer 21

liabilities

Question 22

What are some examples of liabilities found on a personal balance sheet?

Answer 22

• home mortgage
• education loan
• credit card balance
• car loans
• personal loans

Question 23

reports net wages and other income along with spending for a period

Answer 23

cash flow statement

Question 24

if you learn to manage your money well, you will be able to ____ what you really want

Answer 24

if you learn to manage your money well, you will be able to buy what you really want

Question 25

What are some characteristics of a wise money manager?

Answer 25

• set goals
• make wise decisions
• buy wisely
• live within your income

Question 26

listed on the second part of a cash flow statement

Answer 26

cash outflow

Question 27

What are some examples of assets on a personal balance sheet?

Answer 27

• house
• automobile
• household items and furniture
• personal computer
• jewelry
• investments (stocks, bonds, etc)
• clothing
• rare coins
• savings account
• checking account

Question 28

The current value of all ____ of an individual or family is the first thing stated on a balance sheet

Answer 28

assets

Question 29

items of value

Answer 29

personal assets

Question 30

how often are balance sheets prepared?

Answer 30

monthly or quarterly (every 3 months)

Question 31

what is another name for cash outflows?

Answer 31

expenditures

Question 32

a balance sheet is a helpful way to measure financial ____

Answer 32

strength

Question 33

cash inflows - ______ = net cash flow

Answer 33

cash inflows - cash outflows = net cash flow

aka

total income - total spending = net cash flow

Question 34

the money you have available to spend as a result of working or from other income, such as interest earned on your savings

Answer 34

cash inflows

Question 35

calculate

assets: $26,000
liabilities: _____

net worth: $19,000

Answer 35

liabilites - $7,000

26000-19000=7000

Question 36

the amount of a paycheck after taxes and other payroll deductions

Answer 36

net pay / take-home pay

Question 37

What are some deductions taken out of your paycheck?

Answer 37

• retirement contributions (401k)
• charges for health benefits/insurance
• local, state and federal taxes

Question 38

your _____ pay is the amount you actually have available to spend

Answer 38

take-home pay / net pay

Question 39

a payment for rent represents

• a cash inflow
• a cash outflow
• a liability
• an asset

Answer 39

a cash outflow

Question 40

What two financial statements are used in money management?

Answer 40

the balance sheet

the cash flow statement

Question 41

a record of assets and liabilities at a point in time

Answer 41

balance sheet

Question 42

amounts spent for food, clothing, transportation, and other living costs

Answer 42

cash outflows

Question 43

the day to day financial activities associated with using limited income to satisfy your unlimited needs and wants

Answer 43

money mangement