Question 1

On your personal balance sheet,your assets should include anything of value that you own.

Accepted Answer

Assets are defined as anything of value that you own, such as cash, stocks, real estate, or personal possessions. Therefore, on your personal balance sheet, your assets should include all of these items.

Question 2

Your computer and car should both be listed on the asset side of your personal balance sheet.

Accepted Answer

Both your computer and car are considered assets, as they hold value and contribute to your overall net worth.

Question 3

With respect to personal financial planning,the first thing to do with any extra money you have is to start a savings plan.

Accepted Answer

The first step in personal financial planning should be to pay off any high-interest debt, as the interest on such debt can often exceed what you would earn through savings or investments.

Question 4

The value of education is often exaggerated when searching for a good job.

Accepted Answer

The answer of The value of education is often exaggerated...

Question 5

One step toward the goal of taking control of your finances is to keep track of all your expenses.

Accepted Answer

Keeping track of all your expenses is an important step in taking control of your finances. This helps you understand where your money is going and make informed decisions about your spending habits.

Question 6

One way to motivate yourself to start saving is to visualize your goals and think about how much money it will take to achieve them.

Accepted Answer

Visualizing your goals and determining how much money is needed to achieve them can help motivate you to start saving towards them.

Question 7

It is usually better to use any money left after paying monthly bills to pay off debts that carry high interest rates rather than putting that money into a savings account.

Accepted Answer

Paying off debts with high interest rates will save you more money in the long run than earning interest on savings account with lower interest rates.

Question 8

Your personal balance sheet will reflect the same fundamental accounting equation as the balance sheet for a business: assets = liabilities + owners' equity.

Accepted Answer

The accounting equation of assets = liabilities + owners' equity applies to both personal and business balance sheets.

Question 9

Over 35% of U.S.households do not have a retirement account.

Accepted Answer

According to a study by the National Institute on Retirement Security, over 35% of U.S. households do not have a retirement account.

Question 10

Once you have evaluated your current financial situation and know your sources of income and expenses,you have reached the point where you can establish a personal budget.

Accepted Answer

Once you have assessed your income and expenses, you can create a budget based on your financial situation.

Question 11

A major source of revenue on your personal income statement is your salary or wages from your job.

Accepted Answer

Your salary or wages from your job is typically the largest source of income on your personal income statement.

Question 12

The first step in getting control of your finances is to prepare a budget.

Accepted Answer

The answer of The first step in getting control of...

Question 13

Credit-card debt represents an asset on a consumer's balance sheet.

Accepted Answer

Credit-card debt represents a liability, not an asset, on a consumer's balance sheet.

Question 14

If your personal liabilities exceed your assets,your are on the road to financial security.

Accepted Answer

If your personal liabilities exceed your assets, it means you have a negative net worth and are not financially secure. Financial security is achieved when your assets exceed your liabilities.

Question 15

In order to get in the habit of saving,personal financial advisors suggest that you save first and wait to pay off any debts until you've accumulated at least $10,000 in cash,savings accounts,CDs and other liquid assets.

Accepted Answer

It is generally recommended to prioritize paying off high-interest debt before building a large emergency fund. It is important to have some savings for unexpected expenses, but the specific amount can vary based on individual circumstances.

Question 16

The U.S.government provides several types of financial incentives to encourage people to attend college.

Accepted Answer

The U.S. government offers financial incentives such as grants, scholarships, work-study programs, and student loans to encourage individuals to attend college.

Question 17

Managing the finances of a household is similar to managing the finances of a small business.

Accepted Answer

Both require budgeting, tracking expenses, monitoring cash flow, making strategic financial decisions, and planning for future expenses or investments.

Question 18

About half of the U.S.population accumulates enough money to afford a comfortable retirement.

Accepted Answer

According to a 2019 survey by the Federal Reserve, only 37% of non-retired adults think their retirement savings are on track, and 25% have no retirement savings or pension whatsoever. Therefore, it is false that about half of the U.S. population accumulates enough money to afford a comfortable retirement.

Question 19

If you find yourself regularly running out of cash,your only real option is to focus your attention on finding ways to increase your income.

Accepted Answer

While increasing income is one option, managing expenses, budgeting, and saving are also crucial strategies for improving financial health.

Question 20

The average lifetime income of someone with an undergraduate degree is about $1.6 million higher than for someone with only a high school diplom
A.

Accepted Answer

This statement is true and supported by research from the College Board. The data shows that individuals with undergraduate degrees earn significantly more over their lifetime compared to those with only a high school diploma.

Quiz 25: Managing Personal Finances