WGU D363 QUESTIONS AND ANSWERS SET A+
✔✔How should credit card charges be handled within a personal budget?
Credit card charges should be recorded at the time of the transaction.
Record credit card transactions once the monthly statement is received. Credit card
charges are not recorded in a personal budget but instead in their own worksheet.
List credit card transactions in a separate section of the personal budget for tracking
purposes. - ✔✔Financial advisors advise clients to record credit card charges at the
time of the transaction to have an accurate picture of monthly spending.
✔✔Diego wants to know if he has enough income and savings to cover all of his debt
obligations.
How should Diego answer this question?
Calculate the debt payments-to-disposable-income ratio
Calculate the asset-to-debt ratio
Calculate the debt-to-income ratio
Calculate the liquidity ratio - ✔✔Asset-to-debt ratio indicates if there are enough cash
assets to meet the debt obligations. A high ratio is desired.
✔✔Why do financial experts suggest that couples close redundant bank accounts?
To improve their credit scores
To help pay off debt faster
To save money on banking and account fees
To facilitate the budgeting process - ✔✔The more open bank accounts partners have
the more fees they are likely to pay. Financial experts suggest keeping only essential
accounts.
✔✔Nora wants to take her dream vacation to Ghana. She needs to save $5,000 for the
trip, and she wants to travel in two years.
Which approach to savings should Nora consider to achieve her financial goal?
Compound
Short-term
Long-term
, Intermediate-term - ✔✔Intermediate-term savings goals can typically be reached in two
to five years, for example putting money away for an overseas vacation.
✔✔William creates a budget that estimates $1,750 for his summer vacation. He further
breaks down the costs this way:
Hotel - $900
Public Transportation - $50
Restaurants - $500
Museum Pass - $100
Other Entertainment - $200
What is this list an example of?
A subordinate budget
A budget variance
A budget exception
A net surplus - ✔✔A subordinate budget is a detailed list of planned expenses within a
single budgeting classification.
✔✔What is the term used to describe the amount of money that one brings home each
pay period?
Interest income
Discretionary income
Disposable income
Gross income - ✔✔Disposable income, that is, take-home pay, is the amount of money
paid each pay period, after taxes and other expenses have been withheld.
✔✔What is used to estimate monthly income and expenses as part of the budgeting
process?
Intake-output calendar
Discretionary expenses fund
Cash-flow calendar
Revolving savings fund - ✔✔Answer
Correct:A cash-flow calendar includes estimates for monthly income and expenses.
✔✔William just created a budget and is concerned that there is so little money left over
at the end of the month. He wants to cut his spending to increase the money left over.
What would a financial planner suggest to reduce spending?
Keep the TV and cable box plugged into a power strip, and only turn the power strip on
in the evenings when it is time to watch television.
Install a programmable thermostat, so that the air conditioner and furnace are only
working when someone is actually home. - ✔✔"Keep the TV and cable box plugged into
a power strip, and only turn the power strip on in the evenings when it is time to watch
✔✔How should credit card charges be handled within a personal budget?
Credit card charges should be recorded at the time of the transaction.
Record credit card transactions once the monthly statement is received. Credit card
charges are not recorded in a personal budget but instead in their own worksheet.
List credit card transactions in a separate section of the personal budget for tracking
purposes. - ✔✔Financial advisors advise clients to record credit card charges at the
time of the transaction to have an accurate picture of monthly spending.
✔✔Diego wants to know if he has enough income and savings to cover all of his debt
obligations.
How should Diego answer this question?
Calculate the debt payments-to-disposable-income ratio
Calculate the asset-to-debt ratio
Calculate the debt-to-income ratio
Calculate the liquidity ratio - ✔✔Asset-to-debt ratio indicates if there are enough cash
assets to meet the debt obligations. A high ratio is desired.
✔✔Why do financial experts suggest that couples close redundant bank accounts?
To improve their credit scores
To help pay off debt faster
To save money on banking and account fees
To facilitate the budgeting process - ✔✔The more open bank accounts partners have
the more fees they are likely to pay. Financial experts suggest keeping only essential
accounts.
✔✔Nora wants to take her dream vacation to Ghana. She needs to save $5,000 for the
trip, and she wants to travel in two years.
Which approach to savings should Nora consider to achieve her financial goal?
Compound
Short-term
Long-term
, Intermediate-term - ✔✔Intermediate-term savings goals can typically be reached in two
to five years, for example putting money away for an overseas vacation.
✔✔William creates a budget that estimates $1,750 for his summer vacation. He further
breaks down the costs this way:
Hotel - $900
Public Transportation - $50
Restaurants - $500
Museum Pass - $100
Other Entertainment - $200
What is this list an example of?
A subordinate budget
A budget variance
A budget exception
A net surplus - ✔✔A subordinate budget is a detailed list of planned expenses within a
single budgeting classification.
✔✔What is the term used to describe the amount of money that one brings home each
pay period?
Interest income
Discretionary income
Disposable income
Gross income - ✔✔Disposable income, that is, take-home pay, is the amount of money
paid each pay period, after taxes and other expenses have been withheld.
✔✔What is used to estimate monthly income and expenses as part of the budgeting
process?
Intake-output calendar
Discretionary expenses fund
Cash-flow calendar
Revolving savings fund - ✔✔Answer
Correct:A cash-flow calendar includes estimates for monthly income and expenses.
✔✔William just created a budget and is concerned that there is so little money left over
at the end of the month. He wants to cut his spending to increase the money left over.
What would a financial planner suggest to reduce spending?
Keep the TV and cable box plugged into a power strip, and only turn the power strip on
in the evenings when it is time to watch television.
Install a programmable thermostat, so that the air conditioner and furnace are only
working when someone is actually home. - ✔✔"Keep the TV and cable box plugged into
a power strip, and only turn the power strip on in the evenings when it is time to watch
