Personal Finance Study Set 1

Insolvency results from earning more than you spend.

In some cases insolvency can lead to bankruptcy.

Net income is used in calculating one's net worth.

To calculate your net worth,subtract your total debt from your total assets.

According to the Keown book,the median net worth for American families in which the head of the household is less than 35 years old is below $10,000.

A vehicle leased in your name is an example of a tangible asset that you would list on your balance sheet.

The house that you are leasing from a landlord is an example of a tangible asset that you would list on your balance sheet.

The term "fair market value" refers to how the price of an asset has changed since its original purchase.

Current liabilities are those that can typically be paid off in full within 12 months.

To determine your net worth,subtract your liabilities from your positive net equity.

Before you can hope to achieve your financial goals,you will need to first measure your current financial health and develop a plan and a budget.

Planning and budgeting requires

The first section of a balance sheet represents your

When measuring your current financial health it is important to create

Assets that you purchase for the purpose of accumulating wealth to satisfy your financial goals are called

Liabilities are best described as

________ can be more than or less than the price you paid for a given asset,depending on what others are willing to pay for that asset today.

Your ________include cash,checking and savings account balances,and money market funds.

The term "fair market value" refers to

The common thread among investment assets is that