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FIN 2114 Invest & Financial Literacy Exam Questions with Correct Answers
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  • Financial Literacy

Balance Sheet - Answer-A financial statement that reports assets, liabilities, and owner's equity on a specific date. Income Statement - Answer-A financial statement showing the revenue and expenses for a fiscal period. START OF EXAM 1 T/F: Once a sound financial plan is in place, there sh...

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  • October 12, 2024
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  • 2024/2025
  • Exam (elaborations)
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  • fin 2114 invest financial literacy exam question
  • balance sheet answer a financial statement that

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FIN 2114 Invest & Financial Literacy
Exam Questions with Correct Answers
Balance Sheet - Answer-A financial statement that reports assets, liabilities, and
owner's equity on a specific date.

Income Statement - Answer-A financial statement showing the revenue and expenses
for a fiscal period.

START OF EXAM 1

T/F: Once a sound financial plan is in place, there should be no need to ever change it.
- Answer-FALSE

Being financially secure involves balancing what you earn with
A) your investments.
B) what you spend.
C) your retirement plans.
D) your current level of debt. - Answer-B) what you spend.

Personal financial planning can help you to
A) deal with unplanned health issues.
B) minimize your tax payments to Uncle Sam.
C) minimize your chances of personal bankruptcy.
D) have enough money for a comfortable retirement.
E) all of the above. - Answer-E) all of the above

What elements are found in an effective financial plan?
A) Flexibility to allow for changes in your situation
B) Sufficient liquidity to meet unexpected needs
C) Insurance protection from catastrophic events
D) Helps you legally reduce the amount of taxes you owe
E) All of the above - Answer-E) All of the above

Evaluating your financial health consists of
A) preparing a personal balance sheet.
B) determining what you are worth.
C) preparing a personal income statement.
D) determining where your money comes from and where it goes.
E) all of the above. - Answer-E) all of the above.

While reviewing your current financial plan, you discover that you most likely won't
achieve your long term financial goals. What should you do?
A) Look at increasing your income.

,B) Look at cutting back your expenses.
C) Look at revising your goals.
D) All of these would be realistic things to do. - Answer-D) All of these would be realistic
things to do.

T/F: Proper financial planning can help you use your current income to achieve your
long-term financial goals. - Answer-TRUE

The major reason to make a financial plan is to
A) account for your spending.
B) see where you are overspending or underspending.
C) achieve your financial goals.
D) allow for a surplus.
E) serve as a tax planning guide. - Answer-C) achieve your financial goals.

An economic condition in which rising prices reduce the purchasing power of money is
termed
A) deflation.
B) inflation.
C) stagflation.
D) cash erosion.
E) none of the above. - Answer-B) inflation.

T/F: According to a resumedoctor.com recruiting survey, the most common mistake
made by job interviewees is talking too much. - Answer-TRUE

Which of the following statements applies to obtaining an undergraduate college
degree?
A) They are expensive and rarely pay off in increased earnings.
B) There is no relationship between personal wealth and earning a college degree.
C) It may be the single best investment you will ever make.
D) All of the above. - Answer-C) It may be the single best investment you will ever
make.

_________ is the process of identifying a job that you feel is important and that will lead
to the kind of lifestyle you desire.
A) Financial planning
B) Career planning
C) Goal planning
D) Retirement planning - Answer-B) Career planning

T/F: Net income is used in calculating one's worth. - Answer-FALSE

T/F: To calculate your net worth, subtract your total debt from your total assets. -
Answer-TRUE

, T/F: Current liabilities are those that can typically be paid off in full within 12 months. -
Answer-TRUE

T/F: Before you can hope to achieve your financial goals, you will need to first measure
your current financial health and develop a plan and a budget. - Answer-TRUE

Planning and budgeting requires
A) control.
B) financial restraint.
C) discipline.
D) all of the above. - Answer-D) all of the above.

Liabilities are best described as
A) monetary items of value that you own.
B) financial debts and obligations that you owe.
C) your net worth.
D) assets that depreciate over time.
E) intangible obligations - Answer-B) financial debts and obligations that you owe.

Your ______ include cash, checking and savings account balances, and money market
funds
A) monetary assets
B) tangible assets
C) physical assets
D) investment assets - Answer-A) monetary assets

Your financial situation is insolvent when
A) your expenses exceed your income.
B) your assets are less than your liabilities.
C) your net worth is positive.
D) your debt ratio is too high. - Answer-B) your assets are less than your liabilities.

T/F: An income statement tracks the amount of money you have coming in and going
out over some period of time, such as a month or a year. - Answer-TRUE

Which of the following might be found on an income statement?
A) Wages and salaries
B) Interest and dividends
C) Income taxes paid
D) Payroll taxes paid
E) All of the above - Answer-E) All of the above

If your liabilities are greater than the value of your assets you are considered
A) unstable.
B) bankrupt.
C) insolvent.

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