Personal Finance - Lesson 2 Assessment
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Lesson 2 Assessment
6.857142857142857/8.0 points (ungraded)
How well do you know the information presented in Lesson 2? Answer these questions to find out. If you do well, you may be
ready to move on to the next lesson. If you are unable to answer the questions, you may want to go back to the lesson and
engage with the content.
Question 1
Nora’s car broke down, and the unexpected out-of-pocket cost to fix it was $1,000. Nora’s expenses now exceed her income for
this month.
What will Nora’s cash-flow statement for this month show?
Correct:
Because her income is less than her expenses, her cash-flow statement would show a deficit.
Question 2
Lulu wants to create a budget, but she does not know where to start.
What should a financial planner advise Lulu?
Correct:
A financial advisor would advise their client to record all expenses for 30 days to see exactly where the money is currently being
spent.
Question 3
How should credit card charges be handled within a personal budget?
A variable loss
A surplus
A net gain
A deficit
Record all expenses for 30 days to see how income is currently being spent
Use only a debit card for 30 days to easily track where money is being spent
Create budget categories and estimate monthly expenses and income
Document a reason for each expense, whether paid by check, cash, or card
Credit card charges should be recorded at the time of the transaction.
Record credit card transactions once the monthly statement is received.
Credit card charges are not recorded in a personal budget but instead in their own worksheet.
List credit card transactions in a separate section of the personal budget for tracking purposes.
Personal Finance
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Correct:
Financial advisors advise clients to record credit card charges at the time of the transaction to have an accurate picture of
monthly spending.
Question 4
Diego wants to know if he has enough income and savings to cover all of his debt obligations.
How should Diego answer this question?
Correct:
Asset-to-debt ratio indicates if there are enough cash assets to meet the debt obligations. A high ratio is desired.
Question 5
Why do financial experts suggest that couples close redundant bank accounts?
Correct:
The more open bank accounts partners have the more fees they are likely to pay. Financial experts suggest keeping only
essential accounts.
Question 6
Nora wants to take her dream vacation to Ghana. She needs to save $5,000 for the trip, and she wants to travel in two years.
Which approach to savings should Nora consider to achieve her financial goal?
Correct:
Intermediate-term savings goals can typically be reached in two to five years, for example putting money away for an overseas
vacation.
Calculate the debt payments-to-disposable-income ratio
Calculate the asset-to-debt ratio
Calculate the debt-to-income ratio
Calculate the liquidity ratio
To improve their credit scores
To help pay off debt faster
To save money on banking and account fees
To facilitate the budgeting process
Compound
Short-term
Long-term
Intermediate-term
Personal Finance
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Question 7
William creates a budget that estimates $1,750 for his summer vacation. He further breaks down the costs this way:
Hotel – $900
Public Transportation – $50
Restaurants – $500
Museum Pass – $100
Other Entertainment – $200
What is this list an example of?
Incorrect:
A budget exception occurs when a budget estimate differs from the amount of the actual expense.
Question 8
What is the term used to describe the amount of money that one brings home each pay period?
Correct:
Disposable income, that is, take-home pay, is the amount of money paid each pay period, after taxes and other expenses have
been withheld.
Question 9
What is used to estimate monthly income and expenses as part of the budgeting process?
A subordinate budget
A budget variance
A budget exception
A net surplus
Interest income
Discretionary income
Disposable income
Gross income
Intake-output calendar
Discretionary expenses fund
Cash-flow calendar
Revolving savings fund
Personal Finance
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Correct:
A cash-flow calendar includes estimates for monthly income and expenses.
Question 10
William just created a budget and is concerned that there is so little money left over at the end of the month. He wants to cut his
spending to increase the money left over.
What would a financial planner suggest to reduce spending? (Choose 2 answers.)
Incorrect:
"Use a debit card for all shopping, so that all transactions are in one place—a checking account." is incorrect. Financial experts
would actually advise using cash for purchases, to keep from spending money that one does not have.
"Install a programmable thermostat, so that the air conditioner and furnace are only working when someone is actually home."
is correct. A programmable thermostat can save up to 15% off cooling and heating bills.
Question 11
Charlotte wants to avoid overspending in any category of her budget.
What ensures proper oversight over personal spending to keep each category in check?
Correct:
Budget controls, such as tracking what you spend and budgeting for shopping trips, are techniques of planned spending that
help you maintain control over personal spending so that those planned amounts are not exceeded.
Question 12
Maya is creating a personal budget.
Which two resources should she have ready before beginning? (Choose 2 answers.)
Increase income tax withholding so that tax liability each year is reduced, even though his take-home pay will decrease
Be efficient, and shop at a shopping mall rather than many individual stores that are more spread out
Keep the TV and cable box plugged into a power strip, and only turn the power strip on in the evenings when it is time
to watch television.
Use a debit card for all shopping, so that all transactions are in one place—a checking account.
Install a programmable thermostat, so that the air conditioner and furnace are only working when someone is actually
home.
Discretionary reporting
Long-term controls
Budget controls
Cash-flow calendars
Financial statements
List of assets
Fixed expenses
List of beneficiaries
Personal Finance
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Correct:
"Financial statements" is correct. Maya should start by gathering recent financial statements, such as banking and investment
statements.
"Fixed expenses" is correct. In order to create an accurate budget, Maya will need to know the exact cost of her fixed expenses.
Question 13
What should the first step be when creating a personal budget?
Correct:
A personal budget starts with a list of total monthly income and expenses.
Question 14
Lucas wants to work on improving his spending habits to be financially successful.
Which plan does Lucas need to follow to achieve his financial goals?
Correct:
A budget is a paper or electronic document used to record both planned and actual income and expenses over a period of time.
Submit
Writing out financial goals
Listing retirement and investment account balances
Listing total monthly income and expenses
Making a list of assets and liabilities
Budget
Investment plan
Net worth statement
Estate plan
Personal Finance
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December 31, 2014 and 2013
Dec. 31, 2014
Dec. 31, 2013
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bloe
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Marketable securities
$ 500,000
$ 400,000
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1,010,000
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740,000
510,000
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Account
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1,900
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4,300
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31
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Bob Steely, Drawing
32
790
Fees Earned
41
9,250
31
Wages Expense
51
2,500
92
Rent Expense
52
1,960
Utilities Expense
53
775
1.94
Depreciation Lxpense
54
250
14.96
Miscellaneous Expense
185
59
04.99
Totals
29,490
29,490
Determine the total liabilities for the period.
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Example 1
Allison currently has a balance of $2,300 in her
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Calculate the net price factor (as a %) and net price (in $) by using the complement method. Round your answer to the nearest cent.
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Chapter 17 Financial Statement Analysis
Problems Series B
PR 17-1B Horizontal analysis of income statement
ов. 1
V 1. Net sales,
30.0% increase
For 2014, Macklin Inc. reported its most significant increase in net income in years. At
the end of the year, John Mayer, the president, is presented with the following condensed
comparative income statement:
1
SPREADSHEET
Macklin Inc.
Comparative Income Statement
2itilid For the Years Ended December 31, 2014 and 2013
GENERALLEDGER
2014
2013
Sales .....
$936,000
$720,000
Sales returns and allowances
26,000
20,000
Net sales.....
$910,000
$700,000
350,000
441,000
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Research and Development
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Chart Of Accounts
General Journal
11. RE.12.01.BLANKSHEET
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12. RE.12.02
Notting Hill Company incurred the following costs for R&D activities:
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85,000
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10,000
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Question 9, P5-18 (similar to)
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(Related to Checkpoint 5.5) (Solving for n) Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $330,000 Rolls-Royce Phantom. Jack currently has $67,960 that he may invest.
He has found a mutual fund with an expected annual return of 4.5 percent in which he will place the money. How long will it take Jack to win Jill's hand in marriage? Ignore taxes and inflation.
The number of years it will take for Jack to win Jill's hand in marriage is years. (Round to one decimal place.)
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Instruction: Answer the following problems with appropriate solutions.
1. JBL expects to sell 7,000 units of wireless earbuds this year at P7,199.00 each. What is the projected
sales revenue?
2. ROS Corporation sold 9,000 flashlight umbrellas in 2020. Their expected units to be sold this year is
10,000 units. What is the percentage change in sales volume?
3. The variable expenses of wearable air purifiers last year amounted to Php500,000. The entrepreneur
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Ch 08: Assignment - Risk and Rates of Return
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Five years of realized returns for CCC are given in the following table. Remember:
1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25
A-Z
years.
2. The returns on its equity are calculated as arithmetic returns.
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3. The historical returns for CCC for 2012 to 2015 are:
2013
2012
2014
2015
2016
Stock return
13.75%
9.35%
16.50%
23.10%
7.15%
Given the preceding data, the average realized return on CCC's stock is
of CCC's historical returns. Based on this conclusion, the
The preceding data series represents
standard deviation of CCC's historical returns is
If investors expect the average realized return from 2012 to 2016 on CCC's…
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