Personal Finance Fundamentals Quiz ch 3

What is the equation for net worth?

• Assets + Liabilities = Net Worth

• Assets – Liabilities = Net Worth

• Liabilities – Assets = Net Worth

• Income – Expenses = Net Worth

Tags

CCSS.7.NS.A.1B

Which of the following should appear on a Statement of Financial Position?

• Contributions to IRAs

• Annual Taxes

• Original Mortgage Balance

• Credit Card Balance

A Cash Flow Statement records inflows and outflows over what period of time?

• A single day

• Monthly, quarterly, or annually

• Every five years

• Only at retirement

Which of the following is considered an inflow on a cash flow statement?

• Mortgage payments

• Food expenses

• Rental income

• Insurance premiums

Tags

CCSS.7.RP.A.3

Burt’s $3,500 annual property taxes would be classified as:

• An asset

• A liability

• An inflow

• An expense

A Current Ratio greater than 1.0 indicates:

• Poor liquidity

• Strong ability to meet short-term liabilities

• Excessive consumer debt

• Over-investment in long-term assets

The Investment Assets-to-Net Worth ratio should be at least:

• 20%

• 30%

• 50%

• 75%

How many months of expenses should a single wage earner keep in an emergency fund?

• 1–2 months

• 3 months

• 6 months

• 12 months

Which of the following should NOT be used to fund an emergency account?

• Short-term CDs

• U.S. Government Bonds

• Cash in a basement safe

• Money market account

Which debt repayment strategy reduces total interest paid?

• Snowball

• Avalanche

• Random repayment

• Balance transfer