Personal Finance Chapter 2 Exam Questions with Correct Answers

Personal Finance Chapter 2 Exam Questions with Correct Answers Money management refers to A. Preparing personal financial statements. B. Day-to-day financial activities. C. Trade-offs that occur with financial decisions. D. Storing financial records for easy access. E. Spending money on current living expenses. - Answer-b Which of the following is NOT a component of money management? A. Storing personal financial records to document business transactions and legal matters. B. Creating personal financial statements to measure and assess financial position and progress. C. Creating a budget. D. None of these are components of money management. E. Storing personal financial records, creating personal financial statements, and creating a budget are all components of money management. - Answer-e A home file should be used for storing A. All financial documents and records. B. Financial records for current needs. C. Documents that require maximum security. D. Obsolete financial documents. E. Records that are difficult to replace. - Answer-b Which of the following financial documents would most likely be stored in a safe deposit box? A. W-2 forms B. Personal financial statements C. Warranties D. Marriage certificates E. Checking account statements - Answer-d Which of the following is most correct? A. A warranty belongs in a safe deposit box. B. A birth certificate should be kept in a personal computer system. C. Tax records belong in a home file. D. A plan for effective budgeting belongs in your safe deposit box. E. Adoption papers belong in a home file. - Answer-c Which of the following is most correct? A. Rare coins and stamps belong in a safe deposit box. B. A birth certificate should be kept in a personal computer system. C. W-2s for tax records belong in a safe deposit box. D. A plan for effective budgeting belongs in your safe deposit box. E. Adoption papers belong in a home file. - Answer-a A broker statement is an example of a(n) ____________ record. A. investment B. insurance C. estate planning D. tax E. consumer purchase - Answer-a The number of personal financial records a household has to organize may seem overwhelming. How long should you keep copies of your tax returns? A. Until you receive your refund B. Until the end of the current year C. Three years D. Seven years E. Permanently - Answer-d The number of personal financial records a household has to organize may seem overwhelming. How long should you keep documents relating to the purchase of real estate? A. Until the mortgage is paid off B. Until you move out of the house C. Three years D. Seven years E. Indefinitely - Answer-e