Text Questions 6
Review Questions
1. What is a safe deposit box? What financial records are best kept in one?
A safe deposit box is a private, secure storage area at a location such as a bank.
2. What are liquid assets? What are non-liquid assets? What are some examples of each?
Liquid assets are assets that can be quickly and easily converted to cash.
3. What are liabilities? Describe two different types of liabilities.
Liabilities are the amounts of money due to others that need to be paid now.
4. What is net worth?
Net worth is the difference between your assets and your liabilities.
5. What is budget variance?
A budget variance is any difference between a budget and what was actually spent during the time period.
Critical Thinking Questions
1. Why are financial records important? How does keeping organized financial records contribute to successful money management?
•Prepare your financial statements
•Identify sources of your income
•Keep track of your deductible expenses
•Keep track of your basis in property
•Prepare your tax returns
•Support items reported on your tax returns
2. Create a cash flow statement for your own finances. Why are cash flow statements useful in managing money?
3. What are the characteristics of successful budgets? What can you do to cultivate these successful characteristics in your own money management?
4. What are the pros and cons of using the different types of budget systems? Which one do you prefer?
Pros:
Budgeting earmarks your money, Budgeting is an effective tool to get you on track, Budgeting keeps you organized.
Cons:
Budgeting is like being on a diet, Budgets only work if you stick to them, Budgeting takes a lot of time.
5. Create a monthly budget for yourself using the steps discussed in the unit. If you don't wish to discuss your financial situation, you can create a budget based on an average individual your age.
1. What is a safe deposit box? What financial records are best kept in one?
A safe deposit box is a private, secure storage area at a location such as a bank.
2. What are liquid assets? What are non-liquid assets? What are some examples of each?
Liquid assets are assets that can be quickly and easily converted to cash.
3. What are liabilities? Describe two different types of liabilities.
Liabilities are the amounts of money due to others that need to be paid now.
4. What is net worth?
Net worth is the difference between your assets and your liabilities.
5. What is budget variance?
A budget variance is any difference between a budget and what was actually spent during the time period.
Critical Thinking Questions
1. Why are financial records important? How does keeping organized financial records contribute to successful money management?
•Prepare your financial statements
•Identify sources of your income
•Keep track of your deductible expenses
•Keep track of your basis in property
•Prepare your tax returns
•Support items reported on your tax returns
2. Create a cash flow statement for your own finances. Why are cash flow statements useful in managing money?
3. What are the characteristics of successful budgets? What can you do to cultivate these successful characteristics in your own money management?
4. What are the pros and cons of using the different types of budget systems? Which one do you prefer?
Pros:
Budgeting earmarks your money, Budgeting is an effective tool to get you on track, Budgeting keeps you organized.
Cons:
Budgeting is like being on a diet, Budgets only work if you stick to them, Budgeting takes a lot of time.
5. Create a monthly budget for yourself using the steps discussed in the unit. If you don't wish to discuss your financial situation, you can create a budget based on an average individual your age.