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Exam 24: Managing Personal Finances

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Question 31

Multiple Choice

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Which of the following accounting statements would assist an individual in taking inventory of personal assets and liabilities?

A) income statement
B) balance sheet
C) budget
D) statement of cash flows

E) A) and C)
F) B) and D)

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Question 32

True/False

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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.

A) True
B) False

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Question 33

Multiple Choice

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Many insurance providers offer ________ policies that give a discount to families who buy several types of insurance coverage from them.

Compare the basic features of the traditional IRA and Roth IRA.

Keogh plans are intended to help small business owners save for retirement.

If you are relatively healthy, there is no real reason to buy disability insurance.

Ryan is in need of advice regarding investments, taxes, and insurance for himself and his family. He would be well advised to seek the advice of an insurance salesperson.

When you buy a home, the monthly payments for the home may remain relatively fixed, but your payments for taxes and utilities are likely to increase.

Earnings from traditional IRA investments are taxable at the time they are earned.

Serena is attending her local community college with the goal of getting a good job someday. She knows that financial planning begins first with making money.

Funds invested in savings accounts and certificates of deposit (CDs) have traditionally outperformed stocks as a means of generating long-term financial gains.

One disadvantage of term life insurance is that

Nate and Audrey are married and have careers in business. If one of the two were to die, there would be a sudden drop in income. To provide protection from this risk the couple should purchase

Budgets are

Luke wants to get better control of his personal finances. He should begin by setting up a personal balance sheet and a personal income statement.

The money a worker invests in a 401(k) retirement account reduces that worker's present taxable income.

Disability insurance provides a relatively low-cost way of protecting against lost income due to an accident or illness that prevents you from working for an extended period of time.

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

The earnings on a traditional IRA are

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