Personal Finance Chapter 3 Test

1.

1 point

A debit card cannot be used for online purchases.

True

False

2.

1 point

ʺPay yourself firstʺ means you should assign a portion of your income to saving and investing every month.

True

False

3.

1 point

Your monthly budget should include:

Variable expenses

Discretionary expenses

Fixed expenses

All of the above

4.

1 point

The envelope system works great for managing spending on things that donʹt normally have a fixed monthly expense.

True

False

5.

1 point

Occurs when money is withdrawn from a bank account and the available balance goes below zero

Overdraft

Charge

Reconcile

Budget

6.

1 point

Setting up automatic account transfers is the easiest way to build your savings for your emergency fund or large purchases.

True

False

7.

1 point

Your own record of all your transactions

account statement

check register

bank statement

reconcile

8.

1 point

If you write a zero-based budget every month, it is not necessary to reconcile your account.

True

False

9.

1 point

An item that is bought without previous planning or consideration of the long-term effects

impulse purchase

check carbon

envelope system

sale item

10.

1 point

Writing and following a zero-based budget will help you avoid overspending and impulse purchases.

True

False

11.

1 point

A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero

cash flow statement

zero-based budget

zero-spending plan

envelope system

12.

1 point

A written budget, if followed, removes__________from your finances.

All of the above.

Management by crisis

Guilt

Overspending

13.

1 point

Expenses that remain the same from month to month

variable expense

intermittent expense

discretionary expense

fixed expense

14.

1 point

Which of the following is something that a typical millionaire WOULD do?

Lease a new car

Replace things that are not broken

Spend less money than he or she makes

Carry debt

15.

1 point

The following are guidelines for budgeting with an irregular income EXCEPT:

Prioritize the list in order of importance.

Make a list of all of your expenses for the month ahead.

Budgeting with an irregular income is no different than budgeting with a regular income.

When your check comes in, spend your money all the way down the list.

16.

1 point

To match your bank statement with your checkbook

cash flow plan

check carbon

envelope system

reconcile

17.

1 point

A written cash flow plan

overdraft

impulse purchase

envelope system

budget

18.

1 point

Budgeting is crucial to your financial success.

True

False

19.

1 point

The number-one cause of divorce in North America today is stress and disagreements over money.

True

False

20.

1 point

Percentage of Americans living paycheck to paycheck:

70

40

50

25

21.

1 point

The zero-based budget is the best method of budgeting because:

A zero-based budget allows less money for wants

This type of budget is less complicated than other types of budgets

The zero-based budget ensures that EVERY dollar you make is assigned a specific purpose

Sticking to a zero-based budget requires less discipline

22.

1 point

Series of envelopes that are divided into categories and are used to store cash for planned monthly expenses

zero-based budget

envelope system

cash flow statement

reconcile

23.

1 point

A summary of all the income and outgo over a certain time period

account statement

budget

cash flow statement

reconcile

24.

1 point

Which of the following is a consequence of overdrawing your checking account?

Bounced check fee from the store

Stress from money mismanagement C) Overdraft fee from your bank D) All of the above Stress from money mismanagement

Overdraft fee from your bank

All of the above

25.

1 point

Online bill pay allows you to make payments to whomever you wish without having to write a check and send it in the mail.

True

False