ANS2FA- 2.01 Quiz

What are current assets?

• Items with a useful life of more than one year

• Items quickly convertible to cash

• Debts owed

• Constant expenses

What is the formula for calculating net worth or owner's equity?

• Total assets minus total liabilities

• Total assets multiplied by total liabilities

• Total liabilities divided by net worth

• Total assets plus total liabilities

What is the purpose of a balance sheet?

• To access individual accounts or make cash withdrawals

• To provide tax advantages for long-term savings

• To allocate future personal income towards savings

• To show the financial status of a business

What are fixed costs?

• Expenses that changes in proportion to how much is produced

• Items that can quickly be converted to cash

• Expenses that are constant

• Debts owed

What is the function of a checking account?

• Allows depositing and withdrawing funds

• A savings account with tax advantages

• Benefits in addition to normal wages

• A mandated contribution to government

What is credit?

• Money made available based on the borrower's ability to repay

• Benefits to employees besides wages or salaries

• A service by financial institutions

• An itemized list of assets

What is an Individual Retirement Account (IRA)?

• A savings account with tax advantages for long-term saving and investing

• A method of extending credit

• A financial plan for allocating future income towards savings

• A written record of financial activities, position, and performance

What are non-wage compensations?

• Items that have a useful life of more than one year

• Debts owed

• Expenses that are constant

• Benefits provided to employees in addition to their normal wages or salaries

What are taxes?

• Debts owed

• Expenses that change with production

• Quickly convertible to cash items

• A mandated contribution to government

What is the purpose of a personal budget?

• To convey the financial activities, position, and performance of a person or company

• To create a financial plan that allocates future personal income towards savings, expenses, and taxes

• To provide tax advantages for long-term savings

• To ensure accuracy and for tax, financing, or investing purposes