46. (p. 49-51) When creating a personal balance sheet which of the following is considered to be a personal possession asset? A. A five-year-old television set B. A home C. Cash withdrawn from an ATM D. Retirement investments E. Vacation property 47. (p. 49-51) When creating a personal balance sheet which of the following is an investment asset? A. Cash value of life insurance B. Checking account C. Possessions in your home D. Retirement account E. Vacation property 48. (p. 49-51) When creating a personal balance sheet which of the following is a current liability? A. Checking account B. Net worth C. Auto loan D. Money your sister owes you in two years E. Charge account 49. (p. 49) The amount you would have if everything of value would be sold and all debts would be paid in full. A. Net assets. B. Net worth. C. Total liabilities. D. Total income. E. Budgeted expenses. 50. (p. 49) The equation to calculate net worth is: A. Assets – cash outflows = net worth B. Cash inflows – liabilities = net worth C. Cash inflows – cash outflows = net worth D. Assets – liabilities = net worth E. Cash inflows liabilities = net worth 51. (p. 51) The inability to pay debts when they are due is called: A. Liabilities B. Insolvency C. Net worth D. Cash flow E. Liquid assets 52. (p. 51) Which of the following situations describes a person who could be insolvent? A. Assets $56 000; annual expenses $60 000 B. Assets $78 000; net worth $22 000 C. Liabilities $45 000; net worth $6 000 D. Assets $40 000; liabilities $45 000 E. Annual cash inflows $45 000; liabilities $50 000 53. (p. 52) All of the following are ways that households can increase their net worth except: A. Increase their savings B. Reduce spending C. Increase value of investments D. Reduce amounts owed E. Increase their debt ratio 54. (p. 52) Which of the following will increase the net worth of a household? A. Decrease saving by $50 per month B. Increase the amount borrowed for major purchases C. Decrease spending by $5 per day D. Invest in possessions whose values do not increase E. Keep an extra $100 in a checking account instead of a savings account 55. (p. 50 – 52) Which of the following is a cash inflow? A. Mail rent check B. Buy groceries C. Make a loan payment D. Receive a paycheck E. Pay medical expenses
