Test Bank For PFIN 6th Edition by Billingsley
Test Bank for PFIN 6th Edition by Billingsley is a comprehensive resource that provides a wide range of questions and assessments to evaluate the knowledge and skills of students in the area of personal finance. The test bank covers all the key topics that are typically included in personal finance courses, including financial planning, taxes, investments, insurance, and retirement planning.
The test bank includes a variety of question types, including multiple-choice, true/false, and short answer questions, as well as case studies and problems that require students to apply their knowledge in real-world situations. The questions are designed to test both conceptual understanding and quantitative skills, and are written at a variety of difficulty levels to challenge students of different abilities.
The PFIN 6th Edition test bank includes a range of resources to help instructors prepare for their course, including chapter-by-chapter outlines, learning objectives, and answer keys for all questions. The test bank is also available in multiple formats, including Word and PDF, making it easy for instructors to customize their assessments to meet the needs of their course.
Overall, the PFIN 6th Edition test bank is a valuable resource for instructors looking to assess their students’ understanding of personal finance concepts and to help them succeed in their course and in their future financial planning.
Chapter 02: Using Financial Statements and Budgets
1. The balance sheet shows an individual’s financial condition as of the time the statement is prepared.
a. True
b. False
ANSWER: True
2. A budget is a financial report that forecasts an individual’s current income as a percentage of his or her past earnings.
a. True
b. False
ANSWER: False
3. An income and expense statement provides a measure of financial performance over a period of time.
a. True
b. False
ANSWER: True
4. Financial planning is necessary only if an individual earns a lot of money.
a. True
b. False
ANSWER: False
5. The preparation of an income and expense statement is the first step in the personal financial planning process.
a. True
b. False
ANSWER: False
6. Knowing how to prepare and interpret personal financial statements is a cornerstone of personal financial planning.
a. True
b. False
ANSWER: True
7. Financial plans provide direction to annual budgets.
a. True
b. False
ANSWER: True
8. If an individual obtains a loan to purchase a car in June, this loan amount will be included as income for the month of June.
a. True
b. False
ANSWER: False
9. An individual’s auto loan payments are listed as an expense on the income and expense statement.
a. True
b. False
ANSWER: True
10. If an individual lists his or her gross salary in the income portion of the budget, the expenditures section will include income taxes and social security taxes.
a. True
b. False
ANSWER: True
11. Net income (after taxes) should be used when preparing an income and expense statement.
a. True
b. False
ANSWER: False
12. It is best to prepare an individual’s personal financial statements at least once a year, ideally when drawing up his or her budget.
a. True
b. False
ANSWER: True
13. It is recommended that an individual maintains a ledger to summarize all of his or her financial transactions.
a. True
b. False
ANSWER: True
14. An individual should prepare his or her personal financial statements once in five years.
a. True
b. False
ANSWER: False
15. An individual can maintain his or her personal financial statements using spreadsheet software.
a. True
b. False
ANSWER: True
16. An inability to reach short-term goals will significantly affect one’s ability to reach long-term goals.
a. True
b. False
ANSWER: True
17. An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.
a. True
b. False
ANSWER: True
18. The best way to balance one’s budget is to increase borrowing.
a. True
b. False
ANSWER: False
19. Budgeting and record-keeping are the same.
a. True
b. False
ANSWER: False
20. Estimating expenses using actual expenses from previous years and tracking current expenses make the task of preparing a cash budget easier.
a. True
b. False
ANSWER: True
21. A cash budget has value only if one uses it, reviews it regularly, and keeps careful records of income and expenses.
a. True
b. False
ANSWER: True
22. In a budget, “fun money” is for family members to spend as they like without having to account for how it is spent.
a. True
b. False
ANSWER: True
23. Future value calculations to estimate the funds needed to meet a goal take compounding into account.
a. True
b. False
ANSWER: True
24. A balance sheet describes a person’s:
a. financial position at a given point in time.
b. financial performance over a period of time.
c. financial performance at a given point in time.
d. financial goals over a specific period of time.
e. financial plans over a period of time.
ANSWER: a
25. Which of the following is true of an individual’s income and expense statement?
a. An individual’s income and expense statement describes his or her financial position at a given point in time.
b. An individual’s income and expense statement measures his or her financial performance at a given point in time.
c. An individual’s income and expense statement describes his or her financial goals over a specific period of time.
d. An individual’s income and expense statement measures his or her financial performance over a period of time.
e. An individual’s income and expense statement describes his or her financial position over a period of time.
ANSWER: d
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