Unit 3 test Flashcards
Which of the following is a consequence of overdrawing your checking account?
A) Bounced check fee from the store
B) Stress from money mismanagement
C) Overdraft fee from your bank
D) All of the above
D) All of the above
Doing a budget does not:
A) Show if you are overspending in an area
B) Make overspending more likely
C) Remove guilt and shame sometimes associated with a purchase
D) Make your money go further
B) Make overspending more likely
Your monthly budget should include:
A) Variable expenses
B) Discretionary expenses
C) Fixed expenses
D) All of the above
D) All of the above
Which of the following statements is false?
A) A cash flow statement summarizes all of the income and outgo (spending) over a certain time period.
B) A budget is a written plan for saving and spending.
C) A budget is meant to summarize the saving and spending that has taken place over the past year.
D) The cash flow statement is reflective of what has already taken place.
C) A budget is meant to summarize the saving and spending that has taken place over the past year.
Which of the following is something that a typical millionaire would do?
A) Lease a new car
B) Spend less money than he or she makes
C) Replace things that are not broken
D) Carry debt
B) Spend less money than he or she makes
Rent is a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
D) Intermittent expense
A) Fixed expense
Eating out is a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
D) Intermittent expense
C) Discretionary expense
Car repairs are a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
C) Discretionary expense
Groceries are a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
D) Intermittent expense
B) Variable expense
A written budget, if followed, removes ________ from your finances.
A) Overspending
B) Guilt
C) Management by crisis
D) All of the above
D) All of the above
The following are guidelines for budgeting with an irregular income except:
A) Prioritize the list in order of importance.
B) Make a list of all of your expenses for the month ahead.
C) Budgeting with an irregular income is no different than budgeting with a regular income.
D) When your check comes in, spend your money all the way down the list.
C) Budgeting with an irregular income is no different than budgeting with a regular income.
Percentage of Americans living paycheck to paycheck: A) 70 B) 25 C) 50 D) 40
A) 70
The zero-based budget is the best method of budgeting because:
A) This type of budget is less complicated than other types of budgets
B) A zero-based budget allows less money for wants
C) Sticking to a zero-based budget requires less discipline
D) The zero-based budget ensures that every dollar you make is assigned a specific purpose
D) The zero-based budget ensures that every dollar you make is assigned a specific purpose
Which of the following is not a record-keeping feature you could expect from your bank?
A) A reconciliation sheet
B) An account register
C) Customer service reconciles your account for you
D) A monthly account statement
C) Customer service reconciles your account for you
Which of the following account records would have the most current balance?
A) Account balance statement from the ATM
B) Your own account register
C) Your monthly bank statement
D) All of these records will have accurate account balances
B) Your own account register
The number-one cause of divorce in North America today is stress and disagreements over money.
True or False
True
The envelope system works great for managing spending on things that donʹt normally have a fixed monthly expense.
True or False
True
If you write a zero-based budget every month, it is not necessary to reconcile your account
True or False
False
Budgeting is crucial to your financial success.
True or False
True
Writing and following a zero-based budget will help you avoid overspending and impulse purchases.
True or False
True
A debit card cannot be used for online purchases.
True or False
False
ʺPay yourself firstʺ means you should assign a portion of your income to saving and investing every month.
True or False
True
Online bill pay allows you to make payments to whomever you wish without having to write a check and send it in the mail
True or False
True
Having more than one bank account is never a good idea since it can complicate money management.
True or False
False
Setting up automatic account transfers is the easiest way to build your savings for your emergency fund or large purchases.
True or False
True
Occurs when money is withdrawn from a bank account and the available balance goes below zero
overdraft or reconcile
overdraft
A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero
zero-spending plan or zero-based budget
zero-based budget
Series of envelopes that are divided into categories and are used to store cash for planned monthly expenses
envelope system or check carbon
envelope system
An item that is bought without previous planning or consideration of the long-term effects
sale item or impulse purchase
impulse purchase
To match your bank statement with your checkbook
cash flow plan or reconcile
reconcile
A written cash flow plan
budget or personal finance
budget
Expenses that remain the same from month to month
variable or fixed
fixed
Non-essential expenses
discretionary or intermittent
discretionary
A summary of all the income and outgo over a certain time period
cash flow statement or budget
cash flow statement
Your own record of all your transactions
check register or account statement
check register
