Chapter 3- Planning

Question 1

Factors that affect cash flows

Answer 1

1. Stage in career path
2. Type of job
3. Number of income earners

Question 2

Factors affecting expenses

Answer 2

1 size of family

2. Age
3. Personal consumption behaviour

Question 3

Things to consider when budgeting

Answer 3

Anticipating cash shortages, assessing accuracy of budget, forecasting cash flows, budgeting with a bi weekly pay period, having an annual budget, always improve budget,

Question 4

Assets

Answer 4

Can be classified as liquid, household , and investments

Question 5

Stocks

Answer 5

Certificates representing partial ownership of a firm

Question 6

Bonds

Answer 6

A long term debt securities issues by government agencies of corporations that are collateralized by assets

Question 7

Mutual funds

Answer 7

Investment companies that sell shares to individuals and invest the proceeds in an overall portfolio of investment instruments such as bonds or stocks

Question 8

Current liabilities

Answer 8

Personal debts that will be paid in the near future

Question 9

Liquidity

Answer 9

Your access to funds to cover short term cash deficiencies

Question 10

Cash flow statement

Answer 10

Step one in budgeting

It also measures a persons income and expenses