Finance Chapter 3

A personal balance sheet reports your income and expenses. False
When one money management decision is made, an alternative must be given up. True
Total earnings of a person minus the deductions for taxes and other items is called: take-home pay.
Most income tax documents should be kept for _____ year(s). 7
About what percent of Americans have no emergency fund? 25
A person’s net worth is computed by: subtracting total liabilities from total assets.
A common deduction from a person’s paycheck is for: taxes.
Which one of the following illustrates an insolvent situation? Assets $40,000; liabilities $45,000 $40,000 (assets) – $45,000 (liabilities) = -$5,000 (net worth) (insolvency occurs when liabilities exceed the value of assets)
In order to determine net worth, you would create what kind of report? Balance sheet
The value of items owned minus the amounts owed to others equals: net worth.

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