Budgeting Quiz

Creating a budget is important because it helps in:

• Tracking expenses and savings

• Increasing income

• Avoiding all financial problems

• Eliminating the need for financial planning

What is the first step in the budgeting process? What are examples of cash inflows? What are examples of outflows?

• Identify your current cash inflows and outflows

• Salary, hourly wages, or other money earned in the month

• Any money leaving your wallet/bank account

What is the purpose of a personal cash flow statement?

• To track income and expenses over a period of time

• To calculate net worth

• To assess investment performance

• To determine credit score

Budgets will vary annually.

• True

• False

What does a budget help its user with?

• Saving money on large purchases

• Managing unexpected expenses

• Taking advantage of unexpected opportunities

• All of the above

A cash shortfall occurs when you do not have cash inflow in a month to cover the expenses of that month.

• True

• False

When should a person reevaluate their budget and plan?

• When you start to have less money than what you should from month to month during the budgeting process

• When you have more money than expected

• When there are no changes in your financial situation

• When you receive a financial windfall

Which of the following is a liquid asset?

• House

• Car

• Checking account

• King Sized Bed

Emily owns 50 shares of Company Y’s stock that is currently selling for $200 a share. She also owns 65 shares of Company Z’s stock that is currently selling $147 dollars a share. What is the total value of Emily’s stock holdings?

• $19,555

• $18,555

• $20,000

• $17,000

Which of the following is the least risky investment type?

• Mutual fund

• Stock

• Bond

• Real Estate