11. On the balance sheet, a mortgage loan is recorded as the a. interest only. b

Question

11. On the balance sheet, a mortgage loan is recorded as the
a. interest only.
b. sum of interest paid and the outstanding balance.
c. sum of interest due and the outstanding balance.
d. principal portion only.
e. none of the above.


____ 12. Sonny and Cher have a net worth of $35,000 and total assets of $200,000. If their revolving credit and unpaid bills total $2,200, what are their long-term liabilities?
a. $115,000
b. $140,000
c. $142,200
d. $162,800
e. $165,000


____ 13. You are solvent if your
a. total liabilities exceed total assets.
b. total assets exceed total liabilities.
c. total assets exceed net worth.
d. total liabilities exceed net worth.
e. none of these.


____ 14. If your statement of income and expenditures shows a deficit, you may have
a. increased your debts.
b. increased your assets.
c. added to savings.
d. bought additional insurance.
e. paid off some of your debts.


____ 15. If your total assets equal $87,000 and your total liabilities equal $10,000; your solvency ratio is
a. 11.5%.
b. 13.0%.
c. 77.0%.
d. 87.0%.
e. 88.5%.


____ 16. In order to minimize the difficulty associated with meeting monthly loan payments, the debt service ratio should be
a. above 50%.
b. below 50%.
c. at 35%.
d. below 35%.
e. above 20%.


____ 17. The expenditure categories for your budget should be determined by
a. the BLS Urban Family Budget categories.
b. purchased budget book headings.
c. those used in previous years.
d. current and expected future spending.
e. itemized tax deductions.


____ 18. The need for budget adjustments is indicated when
a. income is stable.
b. account deficits and surpluses balance out.
c. account deficits are more than surpluses.
d. a new calendar year begins.
e. short-term financial goals are achieved.


____ 19. Theresa invested $5,000 in an account she expects will earn 7% annually. Approximately how many years will it take for the account to double in value?
a. 8
b. 9
c. 10
d. 11
e. 12


____ 20. Jamil invested $9,500 in an account he expects will earn 5% annually. Approximately how many years will it take for the account to double in value?
a. 8.8
b. 9.7
c. 10.8
d. 11.4
e. 14.4

Explanation / Answer

11. a. interest only. 12. d. $162,800 13,. c. total assets exceed net worth. 14. a. increased your debts. 15. d. 87.0%. 16. b. below 50%. 17. 18. c. account deficits are more than surpluses. 19. c. 10 20. e. 14.4 please rate appreciated

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