Unit 3 test

Question 1

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

Answer 1

D) All of the above

Question 2

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

Answer 2

B) Make overspending more likely

Question 3

Your monthly budget should include:
A) Variable expenses
B) Discretionary expenses
C) Fixed expenses
D) All of the above

Answer 3

D) All of the above

Question 4

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.

Answer 4

C) A budget is meant to summarize the saving and spending that has taken place over the past year.

Question 5

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

Answer 5

B) Spend less money than he or she makes

Question 6

Rent is a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
D) Intermittent expense

Answer 6

A) Fixed expense

Question 7

Eating out is a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
D) Intermittent expense

Answer 7

C) Discretionary expense

Question 8

Car repairs are a:
A) Fixed expense
B) Variable expense
C) Discretionary expense

Answer 8

C) Discretionary expense

Question 9

Groceries are a:
A) Fixed expense
B) Variable expense
C) Discretionary expense
D) Intermittent expense

Answer 9

B) Variable expense

Question 10

A written budget, if followed, removes ________ from your finances.
A) Overspending
B) Guilt
C) Management by crisis
D) All of the above

Answer 10

D) All of the above

Question 11

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.

Answer 11

C) Budgeting with an irregular income is no different than budgeting with a regular income.

Question 12

Percentage of Americans living paycheck to paycheck: A) 70 B) 25 C) 50 D) 40

Answer 12

A) 70

Question 13

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

Answer 13

D) The zero-based budget ensures that every dollar you make is assigned a specific purpose

Question 14

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

Answer 14

C) Customer service reconciles your account for you

Question 15

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

Answer 15

B) Your own account register

Question 16

The number-one cause of divorce in North America today is stress and disagreements over money.
True or False

Answer 16

True

Question 17

The envelope system works great for managing spending on things that donʹt normally have a fixed monthly expense.
True or False

Answer 17

True

Question 18

If you write a zero-based budget every month, it is not necessary to reconcile your account
True or False

Answer 18

False

Question 19

Budgeting is crucial to your financial success.
True or False

Answer 19

True

Question 20

Writing and following a zero-based budget will help you avoid overspending and impulse purchases.
True or False

Answer 20

True

Question 21

A debit card cannot be used for online purchases.
True or False

Answer 21

False

Question 22

ʺPay yourself firstʺ means you should assign a portion of your income to saving and investing every month.
True or False

Answer 22

True

Question 23

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

Answer 23

True

Question 24

Having more than one bank account is never a good idea since it can complicate money management.
True or False

Answer 24

False

Question 25

Setting up automatic account transfers is the easiest way to build your savings for your emergency fund or large purchases.
True or False

Answer 25

True

Question 26

Occurs when money is withdrawn from a bank account and the available balance goes below zero
overdraft or reconcile

Answer 26

overdraft

Question 27

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

Answer 27

zero-based budget

Question 28

Series of envelopes that are divided into categories and are used to store cash for planned monthly expenses

envelope system or check carbon

Answer 28

envelope system

Question 29

An item that is bought without previous planning or consideration of the long-term effects
sale item or impulse purchase

Answer 29

impulse purchase

Question 30

To match your bank statement with your checkbook
cash flow plan or reconcile

Answer 30

reconcile

Question 31

A written cash flow plan
budget or personal finance

Answer 31

budget

Question 32

Expenses that remain the same from month to month
variable or fixed

Answer 32

fixed

Question 33

Non-essential expenses
discretionary or intermittent

Answer 33

discretionary

Question 34

A summary of all the income and outgo over a certain time period
cash flow statement or budget

Answer 34

cash flow statement

Question 35

Your own record of all your transactions

check register or account statement

Answer 35

check register