Question 1

A personal balance sheet summarizes

Accepted Answer

A)  income,expenses and net worth.
B)  cash inflows,outflows and net worth.
C)  assets,net worth,and income.
D)  assets,liabilities,and net worth.E) A) and B)
F) B) and C)

Question 2

Paradis has total assets of $360 000,current assets of $35 000,current liabilities of $22 000,and total liabilities of $195 000.His debt-to-asset ratio is

Accepted Answer

A)  1.59.
B)  0.63.
C)  0.54.
D)  1.85.E) A) and D)
F) A) and C)

Question 3

Someone with a monthly income of $5000,$5000 in their checking account and monthly expenses of $5000 would have Liquidity Ratio of 2.

Accepted Answer

A) True 
 B)False

Question 4

A liquidity ratio between 1 and 2 is ideal.

Accepted Answer

A) True 
 B)False

Question 5

Balance sheet assets should be valued at

Accepted Answer

A)  original purchase price.
B)  replacement value.
C)  insured value.
D)  fair market value.E) A) and C)
F) C) and D)

Question 6

Property such as a person's home,car,and furniture is called

Accepted Answer

A)  personal assets.
B)  household assets.
C)  major property assets.
D)  long-term assets.E) A) and C)
F) C) and D)

Question 7

What tends to be the case for the retirement life stage?

Accepted Answer

A)  Lower debt levels than in early-earning and mid-earning life stages
B)  Managing expenses for new hobbies becomes challenging.
C)  Managing RRSP investments becomes paramount.
D)  Increase in taxes due to income on retirement fundsE) All of the above
F) B) and C)

Question 8

Which one of the following is a liquid asset?

Accepted Answer

A)  Money in a savings account
B)  A car
C)  Cash in an RRSP
D)  Stock held in an investment accountE) B) and C)
F) A) and D)

Question 9

A low liquidity ratio means that

Accepted Answer

A)  you have very few debts.
B)  you will not likely have trouble paying your monthly bills.
C)  you probably will have trouble paying your monthly bills.
D)  you have many liquid assets.E) B) and C)
F) A) and D)

Question 10

The current financial position of an individual or family is best presented with the use of a

Accepted Answer

A)  net worth statement.
B)  cash flow statement.
C)  balance sheet.
D)  bank statement.E) B) and C)
F) A) and C)

Question 11

If you sell stock from your portfolio to pay off your car loan,your debt ratio of 0.5 will

Accepted Answer

A)  improve (increase) .
B)  improve (decrease) .
C)  remain unchanged.
D)  decrease (unfavourably) .E) B) and C)
F) A) and D)

Question 12

Over time the balance sheet will show that your budgeting process is successful if

Accepted Answer

A)  there is a constant positive cash flow.
B)  you have controlled all spending habits.
C)  your budget is continually accurate.
D)  your net worth increases each year.E) B) and C)
F) A) and B)

Question 13

Credit cards are

Accepted Answer

A)  a good source of short term funds to be used in a period of negative cash flow.
B)  used to spend excessively by some because it avoids using up available cash.
C)  a great way to discipline yourself to delay gratification to the future.
D)  an interest free source of credit as long as the balanced is paid of every other month.E) A) and C)
F) A) and B)

Question 14

Budgeting is the forecasting of future income,expenses,and savings.

Accepted Answer

A) True 
 B)False

Question 15

Net cash flows is defined as which of the following?

Accepted Answer

A)  After tax income minus expenses and saving for an emergency fund,investments and major asset purchases
B)  After tax income minus expenses and saving for an emergency fund and investments
C)  After tax income minus expenses and saving for an emergency fund
D)  After tax income minus expensesE) All of the above
F) A) and B)

Question 16

Salary or wages are the main source of income for most working people.

Accepted Answer

A) True 
 B)False

Question 17

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

Accepted Answer

A) True 
 B)False

Question 18

Getting financial help from family and friends should be your first options in case of emergencies.

Accepted Answer

A) True 
 B)False

Question 19

A net worth statement can be used to monitor the changes in your wealth over time.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not considered an asset for a family?

Accepted Answer

A)  Cash in a chequing account
B)  A mortgaged home
C)  Access to a line of credit
D)  FurnitureE) A) and B)
F) B) and C)

Exam 1: Tools for Financial Planning - Planning with Personal Financial Statements

A personal balance sheet summarizes

Correct AnswerverifiedShow Answer

Getting financial help from family and friends should be your first options in case of emergencies.

Correct AnswerverifiedShow Answer

Credit cards are

Correct AnswerverifiedShow Answer

If you sell stock from your portfolio to pay off your car loan,your debt ratio of 0.5 will

Correct AnswerverifiedShow Answer

Someone with a monthly income of $5000,$5000 in their checking account and monthly expenses of $5000 would have Liquidity Ratio of 2.

Correct AnswerverifiedShow Answer

Salary or wages are the main source of income for most working people.

Correct AnswerverifiedShow Answer

Which of the following is not considered an asset for a family?

Correct AnswerverifiedShow Answer

Balance sheet assets should be valued at

Correct AnswerverifiedShow Answer

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

Correct AnswerverifiedShow Answer

The current financial position of an individual or family is best presented with the use of a

Correct AnswerverifiedShow Answer

What tends to be the case for the retirement life stage?

Correct AnswerverifiedShow Answer

Which one of the following is a liquid asset?

Correct AnswerverifiedShow Answer

A net worth statement can be used to monitor the changes in your wealth over time.

Correct AnswerverifiedShow Answer

Property such as a person's home,car,and furniture is called

Correct AnswerverifiedShow Answer

A low liquidity ratio means that

Correct AnswerverifiedShow Answer

A liquidity ratio between 1 and 2 is ideal.

Correct AnswerverifiedShow Answer

Paradis has total assets of $360 000,current assets of $35 000,current liabilities of $22 000,and total liabilities of $195 000.His debt-to-asset ratio is

Correct AnswerverifiedShow Answer

Budgeting is the forecasting of future income,expenses,and savings.

Correct AnswerverifiedShow Answer

Over time the balance sheet will show that your budgeting process is successful if

Correct AnswerverifiedShow Answer

Net cash flows is defined as which of the following?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified