Test Bank For Personal Financial Planning 13th Edition by Lawrence J. Gitman

Test Bank For Personal Financial Planning 13th Edition by Lawrence J. Gitman

Chapter 2—Using Financial Statements and Budgets

TRUE/FALSE

1.A balance sheet shows your financial condition as of the time the statement is prepared.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY:Bloom’s: Knowledge

2.One could use statements from their various financial institutions to help complete a balance sheet.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY:Bloom’s: Knowledge

3.The income statement includes information on your latest paycheck.

ANS: F PTS: 1 DIF: Challenging OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY:Bloom’s: Analysis

4.The income and expenditures statement provides a measure of financial performance over a period of time.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY:Bloom’s: Knowledge

5.Financial planning is necessary only if you earn a lot of money.

ANS: F PTS: 1 DIF: Easy OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY: Bloom’s: Comprehension

6.Assets listed on your balance sheet must have monetary value.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY: Bloom’s: Comprehension

7.A budget is a detailed statement of what income and expenses occurred over a past period.

ANS: F PTS: 1 DIF: Moderate OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY: Bloom’s: Comprehension

8.A budget is a detailed financial forecast.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-1

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY: Bloom’s: Comprehension

9.Financial assets are intangible assets acquired to achieve long-term personal financial goals.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-2

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY:Bloom’s: Knowledge

10.Assets purchased on credit should be included on the asset side of the balance sheet.

ANS: T PTS: 1 DIF: Moderate OBJ: LO: 2-2

NAT: BUSPROG: Analytic skills STA: DISC: Financial Analysis and Cash Flows

KEY: Bloom’s: Comprehension