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The best way to create a budget is to buy an expensive software package.

A. True
B. False
Setting goals is an important element of financial wellness. Setting goals...
A. Could cover the short term which is within the year
B. Could cover an intermediate term which is up to five years
C. Could cover long term which is more than five years away
D. Gives you an objective view of spending
E. All of the above
Cash flow is the movement of money in and out of your household. True or False?
A. True
B. False
The way to measure cash flow is to: (There are two correct answers)
A. Track all of your income and expenses
B. Track your spend and savings based on your pay schedule
C. Leave out what you put into savings
Special purchases, such as presents and holiday gifts, need to be figured into the budget. The
best way to do this is figure the total amount of the purchases and divide it by 12 months.
A. True
B. False
If your expenses are running high you could, (check all that apply).
A. Look for ways to spend less.
B. Cut back on eating out.
C. Give up on tracking
Once a budget is determined, it should always remain as is.
A. True
B. False
You can adjust your budget by making small changes in your habits.
A. True
B. False
It's never too late to start saving.
A. True
B. False

what is the most important thing you can do? Throw away your credit cards and don’t take out any loans Maintain a balance on your credit cards and pay the minimum every month Pay your bills on time What's the main difference between debit cards and credit cards? Debit cards have a higher interest rate than credit cards Debit cards work like a check while credit cards work like a loan They're really the same thing What's the best way to buy a flat-screen TV? Buy it on a rent-to-own plan . False Which activity can pose the greatest threat to your wallet? Getting a latte at Starbucks every day Taking out student loans to pay for college Spending without a plan If you apply for a store credit card. By looking at your spending and your saving and setting goals you are on the right track to feeling more confident about your financial health. True B. A. how do they decide if they approve you—or turn you down— on the spot? They make sure you look good in their clothes They check out your credit score They make sure you have spent a set amount of money at their store How much money should you keep in your emergency fund? 3% of your current salary The equivalent of 3 months' living expenses Nothing—just use your credit card in case of emergencies If you're trying to build good credit.Overspending can cause a stressful situation.

.Buy it on a credit card and pay it off over time Buy it on a credit card and pay in full when the bill comes due When can you start putting money into a retirement account? When you turn 21 When you begin earning income When you get married What happens if you sign a year-long lease for an apartment and then have to move out after 6 months? You lose your security deposit You may have to pay the rent for the time remaining on the lease You can just cancel the lease Definition: 1. .Long-Term Financing 4.Sinking Funds . sometimes as long as 5-10 years into the future . The projections of dollar allocations to various costs and expenses needed to operate the business given the projected revenues.Operating Budget 11. with the projected ones - Financial Controls 3.Institutional Investors 5.Budget 8.Financial Planning 10. Large organizations that invest their own funds or the funds of others . costs. Sum of borrowed money not backed by specific assets. Ties together all of a firm’s budgets.Commercial Finance Companies 9. .Unsecured Loan 7. costs and expenses for a period longer than one year. Reserve account in which bond issuer periodically retires some part of the principal prior to maturity so enough capital will be accumulated by the maturity date to pay off the bon . Predicts revenues. reliable firm. Process where a firm compares actual revenues. etc.Long-Term Financial Forecast 2. Goal is to optimize the firm’s profitability and make the best use of its money . Borrowed funds needed for a period of longer than one year . Usually only given to established. Financial plan that sets for the management’s expectation and allocates specific use of resources throughout the firm on the basis of those expectations . Funds raised through operations within the firm of through sale of ownership in the firm - Equity Financing 6. They usually accept higher risk companies but charge higher interest rates. Organizations that make short-term loans to borrowers who offer tangible assets as collateral.

Revolving Credit Agreement 30.Promissory Note 23.12.Term- Loan Agreement 14. Corporate certificate indicating that a person has lent money to a firm. Bonds not backed by collateral . Bonds backed by tangible collateral. .Financial Management 26. revenues and expenses . . the higher the interest rate required.Short-Term Financing 21.Commercial Banks & Financial Institutions . . People who make recommendations to top executives regarding strategies for improving the financial strength of a firm . Exact date that the issuer of bonds must pay the principal back to the bondholder(s).Risk-Return Tradeof 19. Line of credit guaranteed by the bank. Predicts revenues. Debt from loans by these is tax deductible.Factoring 32. The job of managing a firm’s resources so it can meet its goals and objectives .Financial Managers 16.Cash Budget 29. A percentage discount is often offered for early payment. Company issuing these is legally bound to make regular interest payments to investors and repay entire prim - Bonds 25. Function in a business that acquires funs for the firm and manages those funds within a firm . Funds raised through various forms of borrowing that must be repaid . Estimates a firm’s projected cash inflows and outflows. - Maturity Date 24. Often reluctant to provide loans to small firms unless they seem promising and well organized. Promissory note that requires the borrower to repay the loan in specified instalments. That the greater the risk a lender takes in making a loan. Written contract with a promise to pay a specific sum at a specific time.Secure Bonds 22.Finance 28. Usually a fee is charged for this.Lending Institutions 17. used to plan for any cash shortages or surpluses during a given period . Predicts cash inflows and outflows in future periods based on expected costs. Highlights a firm’s spending plans for major asset purchases that often require large sums of money . . given to firms with no credit or a bad credit rating . costs and expenses for a period of one year or less .Debt Financing 20. Provide loans of 3-7yrs on average but may be up to 20yrs.Short-Term Financial Forecast 15. . Borrowed funds needed for one year or less .Debenture Bonds 13. Provide loans for businesses. Practice of buying goods and services now and paying for them them later.Capital Budget 31. .Trade Credit 27. Process of selling accounts receivable for cash . Close contact after the loan is issued is also helpful .Cash Flow Forecast 18.

Line of Credit 35. what will be the account debited for $2. . Capital be a debit? Yes No Use the following information for questions 3 through 6: A company using the accrual method of accounting performed services on account in August.) Accounts Receivable Service Revenue . .000 in August? Cash Accounts Receivable (The account Accounts Receivable should be debited in August.000 from the customer. Can be used to make purchases and pay back at a later date. such as property or assets.000 and the company gave the customer credit terms that state the amount is to be paid to the company in September. Unsecured promissory notes of $100k or more that mature in 365 days or less. Assuming that the company prepares monthly income statements. Accounts Receivable.000 in August? Cash Accounts Receivable Service Revenue (You should credit revenues when they are earned) 5. May increase if credit rating improves and/or business grows. Should the $500 entry to the Cash account be a debit? Yes No 2. .) Service Revenue 4. Should the $500 entry to Mary Smith. an asset. Sum of borrowed money backed by something valuable. which account should the company debit? Cash (We always debit Cash when cash is received. Failure to pay will result in lender taking control of the collateral. A small loan from a close relation willing to finance the business. - Family and Friends Loan 34. Best to avoid these. was increased in August. Charge large amount of interest and should only be used as a last resort. 3. The services were for $2.33.Commercial Paper 37. Which account should the company credit for $2. Given amount of unsecured borrowed sum of money a bank will lend to a business.Credit Cards 1. Only large firms with good credit can sell them .Secured Loan 36. In September when the company receives the $2.

about how much should you have in your emergency fund? enough to live comfortably for two to three days enough to live comfortably for two to three weeks enough to live comfortably for two to three months (A typical financial planner will advise you to try to make an emergency fund with enough money to get by two to three months without any other income.000 from the customer.6. and you can still get to the money if you need shouldn't scrimp on drugs . tuition. A mortgage payment would count on your budget as a: fixed expense (A mortgage payment is a fixed expense because you can predict you'll pay it on a consistent basis. What's a smart way to save money on prescription drugs? buy half your dosage buy generic (Generic prescription drugs are chemically identical to brand name. which account should the company credit? Cash Accounts Receivable (When an asset such as Accounts Receivable is decreased. In case you lose your job tomorrow. Which of the following accounts is the best place to keep an emergency fund? money market account (Using a money market account for an emergency fund can help you make money on your savings while you aren't using it. you credit the account) Service Revenue 1. Other fixed expenses include other loan payments. so it is cheaper and not unsafe to defer to generic.) neither of the above -. In September when the company receives the $2. Money markets draw more interest than basic savings or checking accounts.) savings account checking account 4.) 3. Just ask your doctor to prescribe the generic version of your drugs. rent and fixed utilities that don't vary from month to month.) unfixed expense discretionary expense 2.

you'll find the savings are significant. At the grocery store. and the longer you wait to pay off credit card debt. pre-pounded or pre-seasoned meats or poultry can save you preparation time. which in turn even make your immune system weaker. Which of the following is a benefit of staying within budget? happier marriage less stress both of the above (Money difficulties are known to cause stress. Which of the following is NOT a smart way to stay on budget? delay paying of credit card debt (A large part of improving your financial situation means getting out of debt. If you can spare a few minutes to cut. Which of the following would be the most appropriate alternative to an emergency fund? a credit card a home equity line of credit (Some critics say that putting money into an emergency fund is illogical if you have a Home Equity Line of Credit (HELOC). pound or season your meat. the more you'll have to pay in the long run. Making a grocery list and using cash are both good ways to stay on track.) an expense that you need but don't want 7. HELOCs come with checks that you can write immediately in the case of an emergency. Using HELOCs can be dangerous if you're not careful. money problems and arguments are a major cause of divorce.5. you must figure in the interest and fees.) make a grocery list use cash 6. they cost a lot more than plain cuts of meat. However.) . you can save money by buying: pre-seasoned meat pre-cubed meat plain cuts of meat (While pre-cubed. and you can repay the money once you are past the disaster.) 8. In addition. What is a discretionary expense? an expense that you may or may not need depending on your situation an expense that you want but don't need (A discretionary expense is one that you don't need but would like to have.) parents 9.