Fin 101 Exam 1 Review UPDATED ACTUAL Questions And Correct Answers
Terms in this set (72)
TRUE OR FALSE: A home and land should be recorded False
on the personal balance sheet at their original cost.
TRUE OR FALSE: All assets, regardless of category, False
should be recorded on your balance sheet at their
current fair market value.
, TRUE OR FALSE: Money I loaned to a friend is a liability False
on my balance sheet.
TRUE OR FALSE: You may be under-budgeting for food if True
you continually have monthly deficits in the food
category.
Your ________ is an example of a liquid asset. C
a) home
b) charge account
c) checking account
d) life insurance cash value
e) car
Sam and his wife Ann purchased a home in Lubbock, $175,000 asset and $55,000 liability
Texas in 1980 for $100,000. Their original home mortgage
was for $90,000. The house has a current market value of
$175,000 and a replacement value of $200,000. They still
owe $55,000 on their home mortgage. Sam and Sally are
now constructing their balance sheet. How should their
home be reflected on their current personal balance
sheet?
The balance sheet equation is Total assets - total liabilities = net worth
Mandy and Jeff have a net worth of $25,000 and total $115,000
assets of $140,000. If their revolving credit and unpaid
bills total $2,200, what are their total liabilities?
You are solvent if your .... total assets exceed total liabilities
The income and expense statement is specific to ... a specific period of time
TRUE OR FALSE: Tax avoidance is legal, tax evasion is True
illegal
The federal income tax is .... progressive
TRUE OR FALSE: One's marginal tax rate is typically lower False
than one's average tax rate
TRUE OR FALSE: The main objective of tax planning is to True
maximize the amount of money you keep by minimizing
the amount of taxes you pay
TRUE OR FALSE: As a single taxpayer with no False
dependents, one is generally eligible to file as "head of
household"
TRUE OR FALSE: Social security taxes are paid on earned True
income but not investment income
Terms in this set (72)
TRUE OR FALSE: A home and land should be recorded False
on the personal balance sheet at their original cost.
TRUE OR FALSE: All assets, regardless of category, False
should be recorded on your balance sheet at their
current fair market value.
, TRUE OR FALSE: Money I loaned to a friend is a liability False
on my balance sheet.
TRUE OR FALSE: You may be under-budgeting for food if True
you continually have monthly deficits in the food
category.
Your ________ is an example of a liquid asset. C
a) home
b) charge account
c) checking account
d) life insurance cash value
e) car
Sam and his wife Ann purchased a home in Lubbock, $175,000 asset and $55,000 liability
Texas in 1980 for $100,000. Their original home mortgage
was for $90,000. The house has a current market value of
$175,000 and a replacement value of $200,000. They still
owe $55,000 on their home mortgage. Sam and Sally are
now constructing their balance sheet. How should their
home be reflected on their current personal balance
sheet?
The balance sheet equation is Total assets - total liabilities = net worth
Mandy and Jeff have a net worth of $25,000 and total $115,000
assets of $140,000. If their revolving credit and unpaid
bills total $2,200, what are their total liabilities?
You are solvent if your .... total assets exceed total liabilities
The income and expense statement is specific to ... a specific period of time
TRUE OR FALSE: Tax avoidance is legal, tax evasion is True
illegal
The federal income tax is .... progressive
TRUE OR FALSE: One's marginal tax rate is typically lower False
than one's average tax rate
TRUE OR FALSE: The main objective of tax planning is to True
maximize the amount of money you keep by minimizing
the amount of taxes you pay
TRUE OR FALSE: As a single taxpayer with no False
dependents, one is generally eligible to file as "head of
household"
TRUE OR FALSE: Social security taxes are paid on earned True
income but not investment income
