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29 Cards in this Set

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  • Back
Variable expenses are easier to adjust, if necessary, than
Fixed Expenses
Increases in net worth over time come primarily from surpluses indicated in
The income and expense statement.
Your asset-to-debt ratio will likely ... as you get older
Increase
What a willing buyer would pay a willing seller for an asset is its
Fair market value
Which statement summarizes financial transactions over a period of time such as one month or one year?
Income and expense statement
Objective numerical calculations designed to simplify making assessments of your financial condition are referred to as
Financial ratios
Dividing one's annual debt payments by gross income provides one's
Debt service-to-income ratio
The amount of take-home pay remaining after all deductions are withheld for taxes, insurance, union dues and other items is referred to as your _______________________ income.
Disposable
Which of the following ratios tell you if you are putting away enough money each year?
Savings ratio
Tangible assets are also referred to as
Use Assets
Compilations of personal financial data designed to communicate information on money matters.
Financial Statements
The speed and ease with which an asset can be converted to cash is referred to as its
Liquidity
Prestablished plans of action to be implemented in specific financial situations are referred to as
Financial Strategies
If someone wanted to know where their money was coming from and where it was going over the course of a month or year, they would compile a(n)
Cash-Flow Statement
Which of the following financial statements summarizes an individual's financial condition as of a date in time?
Balance Sheet
Items of expenditure are called
Expenses
A bank account would be categorized as a
Monetary Asset
Expenditures that are usually the same amount each time period are called
Fixed expenses.
A net loss on an income and expense statement will
Reduce net worth
Dividing monthly expenses into monetary (liquid) assets provides one's
Basic liquidity ratio.
A debt payments-to-disposable income ratio exceeding what percentage is an indication that the person is carrying too much debt?
16%
Dividing total assets by total debt provides one's
Asset-to-debt ratio.
Which type of financial planner is likely to give the most objective advice?
Fee-only financial planner
Planners that charge an up-front fee for providing services and charge a commission on any securities trades or insurance purchases that they make on your behalf are called
Fee-based financial planners.
Financial planners that have passed a financial services curriculum sponsored by the American College can be designated as a
Chartered Financial Consultant (ChFC).
Compares gross annual debt repayments to gross annual income
Debt-service-to-income ratio
Expenses over which one has considerable control are referred to as ____________________ expenses.
Variable
A family will show a net gain on its income and expense statement if
Income exceeds expenses
One's debt service-to-income ratio should
Decrease as one gets older