True / False Questions 1. Increased demand for a product or service will usually result in lower prices for the item. FALSE 2. Inflation reduces the buying power of money. TRUE 3. When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years. TRUE 4. A decrease in the demand for a product or service may result in a decrease in wages for people producing that item. TRUE 5. A financial plan is another name for a budget. FALSE 6. Short-term goals are usually achieved within the next year or so. TRUE 7. Opportunity costs refer to time, money, and other resources that are given up when a decision is made. TRUE 8. Risks associated with most …show more content…
A. $40,300 B. $41,200 C. $42,000 D. $43,700 E. $46,000 24. Barb Hotchkins is in the 28 percent tax bracket. A tax-exempt employee benefit with a value of $500 would have a tax-equivalent value of: A. $694. B. $528. C. $500. D. $360. E. $140. 25. Tax-deferred employee benefits are A. not subject to federal income tax. B. not subject to state income tax. C. taxed at some future time. D. are taxed at a special rate. True / False Questions 26. Opportunity costs are only associated with money management decisions involving long-term financial security. FALSE 27. A budget is a specific plan of how a person or family will spend their money. TRUE 28. A personal balance sheet reports your income and expenses. FALSE 29. A person 's net worth is the difference between the value of the items owned and the amounts owed to others. TRUE 30. Furniture, jewelry, and an automobile are examples of liquid assets. FALSE 31. Current liabilities are amounts that must be paid within a short period of time, usually less than a year. TRUE 32. A personal cash flow statement presents income and outflows of cash for a given time period, such as a month. TRUE 33. If expenses for a month are greater than income, an increase in net worth will result. FALSE Multiple Choice Questions 34. A personal balance sheet presents: A. amounts budgeted for spending. B. income and expenses
32. Which of the following amounts must be included in the gross income of the recipient?
13. Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Eddy Auto Supplies Balance Sheet December 31, 2014 Cash $84,000 Accounts payable $110,000 Accounts receivable $80,000 Salaries and wages payable $20,000 Inventory $140,000 Mortgage payable $180,000 Prepaid insurance $60,000 Total liabilities $310,000 Stock investments $170,000 Land $190,000 Buildings $226,000 Common stock $240,000 Less: Accumulated Retained earnings $500,000 depreciation ($40,000) $186,000 Total
3.) If the companies sales are down, people that work for the company would suffer.
3. Do you expect this profit level to continue in subsequent years? Why or why not?
d. neither the expenses incurred for office space, equipment, and supplies, nor her foregone salary of $42,000 per year
2. The poorer you are, the worse your economic life has become over the past 30 years.
3. Tina incorporates her sole proprietorship with assets having a fair market value of $100,000 and an adjusted
| C. When the total is less that the designated percentage of your gross income.
year 1 net income would do). Then, its year 2 opening net assets are $276.36,
1.) Competing global markets can make prices of the products we buy decrease. If your produce is cheaper, then which of the following is most likely to be true?
It is said that the essence of budgeting for one's financial plan cannot be equated to a particular debate or discussion. If you really need to have a successful planning for your financial aspects, you need to follow or create budgeting technique which is not only systematic, but also effective. Even if you are earning more than enough from your jobs or business, there is still a need for you to track your financial spending if you really want to control your finances and hard-earned money. There are many people out there claim that they are still unsure of making a budget plan, because doing so will create restrictions and limitations to what they want to do such as buying items, making fun, and experiencing luxury in life. However, it is a false belief because it is not always the case. Making a budgeting plan refers to creating an effective financial plan to help you control all of your finances and how to spend your money in the right direction.
A budget refers to a financial plan that represents the allocation of the income to various expenditure channels such as expenses, savings, and debt repayment. A personal budget is important because avoiding financial surprises and keeping financial stress down helps avoid a crisis and allows you to focus on your overall goals. You cannot avoid all risks in life but if you plan your finances to live within your means, you can avoid being kicked out of your home, losing your car and other terrible things that a solid budget would help you avoid. Knowing what you can afford is a central life skill. Unfortunately, many do not budget even though they know they should (Wagoner, 2012).
Availability of substitutes: If the price of Coca-Cola was to increase, we can say that a lot of consumers would turn to other kind of soft drinks and that bring a result of the quality demanded of Coca-Cola will decline. But if the price of Coca-Cola falls a lot of consumers will change other soft drinks to Coca-Cola
According to this concept the asset is recorded in the books of accounts at the price paid for it and not at its market value. For example: if a business entity purchases a building valued at $15 million from a friend for $12 million, this asset would be recorded at $12 million and not at $ 15 million, because for the business entity the cost was $12 million and not $15 million.