Personal Finance Reading Quiz 2

Assets that you purchase for the purpose of accumulating wealth to satisfy your financial goals are called Investment assets
Liabilities are best described as Financial debt and obligations that you owe
One of the following items would not go on a balance sheet. Which one is it? Mortgage pa‚Äčidments paid
Items on the balance sheet that represent amounts owed to others are termed liabilities.
Your net worth, or your general level of financial worth, is found by subtracting your liabilities from your assets.
An expenditure over which you have no control and are obligated to make is a fixed expenditure.
If your liabilities are greater than the value of your assets you are considered insolvent.
What would happen to your net worth if you sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000? Your net worth would remain the same.
One’s ________ is found by dividing monetary assets by current liabilities and is a good measure of liquidity. Current Ratio
Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. You would most likely use which of the following ratios? Savings ratio

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