Family Finance Exam 1 Chapter 2

Front 1

Variable expenses are easier to adjust, if necessary, than

Back 1

Fixed Expenses

Front 2

Increases in net worth over time come primarily from surpluses indicated in

Back 2

The income and expense statement.

Front 3

Your asset-to-debt ratio will likely ... as you get older

Back 3

Increase

Front 4

What a willing buyer would pay a willing seller for an asset is its

Back 4

Fair market value

Front 5

Which statement summarizes financial transactions over a period of time such as one month or one year?

Back 5

Income and expense statement

Front 6

Objective numerical calculations designed to simplify making assessments of your financial condition are referred to as

Back 6

Financial ratios

Front 7

Dividing one's annual debt payments by gross income provides one's

Back 7

Debt service-to-income ratio

Front 8

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.

Back 8

Disposable

Front 9

Which of the following ratios tell you if you are putting away enough money each year?

Back 9

Savings ratio

Front 10

Tangible assets are also referred to as

Back 10

Use Assets

Front 11

Compilations of personal financial data designed to communicate information on money matters.

Back 11

Financial Statements

Front 12

The speed and ease with which an asset can be converted to cash is referred to as its

Back 12

Liquidity

Front 13

Prestablished plans of action to be implemented in specific financial situations are referred to as

Back 13

Financial Strategies

Front 14

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)

Back 14

Cash-Flow Statement

Front 15

Which of the following financial statements summarizes an individual's financial condition as of a date in time?

Back 15

Balance Sheet

Front 16

Items of expenditure are called

Back 16

Expenses

Front 17

A bank account would be categorized as a

Back 17

Monetary Asset

Front 18

Expenditures that are usually the same amount each time period are called

Back 18

Fixed expenses.

Front 19

A net loss on an income and expense statement will

Back 19

Reduce net worth

Front 20

Dividing monthly expenses into monetary (liquid) assets provides one's

Back 20

Basic liquidity ratio.

Front 21

A debt payments-to-disposable income ratio exceeding what percentage is an indication that the person is carrying too much debt?

Back 21

16%

Front 22

Dividing total assets by total debt provides one's

Back 22

Asset-to-debt ratio.

Front 23

Which type of financial planner is likely to give the most objective advice?

Back 23

Fee-only financial planner

Front 24

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

Back 24

Fee-based financial planners.

Front 25

Financial planners that have passed a financial services curriculum sponsored by the American College can be designated as a

Back 25

Chartered Financial Consultant (ChFC).

Front 26

Compares gross annual debt repayments to gross annual income

Back 26

Debt-service-to-income ratio

Front 27

Expenses over which one has considerable control are referred to as ____________________ expenses.

Back 27

Variable

Front 28

A family will show a net gain on its income and expense statement if

Back 28

Income exceeds expenses

Front 29

One's debt service-to-income ratio should

Back 29

Decrease as one gets older