Question

Which of the following statements is/are correct?

1. The principal but not the interest to be paid this year on a 30-year mortgage is properly
      classified on the Statement of Financial Position as a current liability.

2. A CD with a maturity of 9-months is classified as an investment asset on the Statement of
      Financial Position.

Select one:

a. a.   1 only.

b. b.   2 only.

c. c.   Both 1 and 2.

d. d. Neither 1 nor 2.

Question 12

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Which of the following statements is/are correct?

1. Net worth represents the personal equity that the individual has in his assets and can never be

less than zero.

2. If Lisa purchased a car using 30% cash and 70% debt, her net worth would increase by 30%.

Select one:

a. a.   1 only.

b. b.   2 only.

c. c.   Both 1 and 2.

d. d. Neither 1 nor 2.

Question 13

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Which of the following statements is/are correct?

1. Property titled Joint Tenants with Rights of Survivorship (JTWROS) can only be owned by

married couples.

2. Property titled Tenants by the Entirety can only be owned by married couples.

Select one:

a. a.   1 only.

b. b.         2 only.

c. c.   Both 1 and 2.

d. d. Neither 1 nor 2.

Question 14

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Which of the following statements is/are correct?

1. The Statement of Cash Flows includes monthly recurring cash flows from income and expenses.

2. The Statement of Net Worth explains changes to net worth between two Statements of Financial

Position that are not reported elsewhere on other financial statements.

Select one:

a. a.   1 only.

b. b.         2 only.

c. c.   Both 1 and 2.

d. d. Neither 1 nor 2.

Question 15

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Which of the following statements is/are correct?

1. The emergency fund ratio metric should be 3 to 6 months of non-discretionary cash flows.

2. When calculating the savings rate for a family, any contributions to retirement made by the

employer should be included.

Select one:

a. a.   1 only.

b. b.   2 only.

c. c.   Both 1 and 2.

d. d. Neither 1 nor 2.

Samantha has the following transactions:

• She purchases $5,000 worth of a mutual fund with cash from her savings account.

• She spends $6,000 on a vacation with cash from her money market account

• She spends $10,000 on new furniture, and uses her credit card to make the purchase.

What is the combined impact of these transactions on her net worth?

Select one:

a. a.   $21,000 decrease.

b. b.   $6,000 decrease.

c. c.   $15,000 increase.

d. d.         $6,000 increase.

Given the following:

Tracy and Brett are married.
Their current assets	$9,243
Their current liabilities	$6,921
Their monthly nondiscretionary expenses	$4,693
Their annual combined income	$70,000
Their annual debt payments (excluding monthly housing costs)	$22,084

Assume for this question only that Tracy and Brett’s monthly housing costs (P&I&T&I) are $1,500.

Which of the following lender thresholds will Tracy and Brett meet?

Select one:

a. a. The 28% benchmark.

b. b. The 36% benchmark.

c. c. Both benchmarks.

d. d. Neither benchmark.

Answer 1