Chapter 8.1-Budgeting and Planning

Question 0

Most financial experts agree that families should set aside at least…percent of their disposable income each pay period

Answer 0

10

Question 1

An orderly program for spending, saving, and investing the money you receive

Answer 1

Financial plan

Question 3

Money remaining after expenses are paid

Answer 3

Discretionary income

Question 4

A statement about a product’s qualities performance that the seller assures the buyer are true

Answer 4

Warranty

Question 5

Items of value that a person owns

Answer 5

Assets

Question 7

Expenses that remain constant and cannot be easily changed or removed from the budget

Answer 7

Fix expenses

Question 8

Fixed expenses do not change; variable expenses change according to needs and short-term goals

Answer 8

True

Question 11

When you owe more than you own

Answer 11

Insolvent

Question 12

Expanses that may change according to needs and short-term goals

Answer 12

Variable expenses

Question 13

Net worth is calculated by subtracting your variable expenses from your fixed expenses

Answer 13

False

Question 14

A house payment are examples of

Answer 14

Fixed expenses

Question 15

A major reason for financial planning is to prevent careless spending

Answer 15

True

Question 16

Money you have to spend as you wish - after all required deductions

Answer 16

Disposable income

Question 20

Receipts and documents showing income and expenses should be kept in a safe place because they are proof or evidence to use in the event of an audit

Answer 20

True

Question 21

A personal property inventory is most commonly used for

Answer 21

Proof of loss from fire, theft, or property damage

Question 22

Which of these is a liability?
Car
Car loans 
Stereo
Savings account

Answer 22

Car loans

Question 23

An organized plan whereby you match your expected income with expenses and savings

Answer 23

Budget

Question 24

When your assets are not greater than your liabilities, you are said to be solvent, which is a good financial position

Answer 24

False

Question 26

The IRS can audit your tax returns for a period of…years, except in the case of fraud, where there is no limit

Answer 26

Three

Question 27

The most common purpose for a net worth statement is

Answer 27

Loan or credit application

Question 28

Lunches, medical bills, personal care items, and clothing are all examples of

Answer 28

Variable expenses

Question 29

Amounts of money owed to others

Answer 29

Liabilities

Question 30

A person who promises to pay a note if the maker fails to pay

Answer 30

Co-signer

Question 31

To prepare your personal budget, you should list sources of money you expect to receive, known as income

Answer 31

True

Question 34

When you subtract your debts from the total amount of of things you own, the difference is

Answer 34

Net worth

Question 44

When you own more than you owe

Answer 44

Solvent