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Net Worth(All Correct)

Terms in this set (10)

Which of the following could be true if one decreases their long term liability and increases their liquid assets?
a.
Paid off credit card balance and added money to savings.
b.
Paid off medical bills and invested money.
c.
Paid down mortgage and received a cash prize.
d.
Paid taxes owed and bought a car.
c.
Paid down mortgage and received a cash prize.
The Roth family has liquid assets of $10,000, use assets of $150,000 and investment assets of $34,000. They also have liabilities totaling $108,000. If their total liabilities increase by $7,000 over the next year, by how much would the Roth family need to increase their assets in order to have a net worth of $100,000?
a.
$7,000
b.
$14,000
c.
$21,000
d.
$28,000
c.
$21,000
Which of the following increases liabilities but not assets?
a.
Taking out a loan to buy a new car
b.
Taking out a loan to go on vacation
c.
Using a credit card to buy a computer
d.
Paying off a student loan
b.
Taking out a loan to go on vacation
Which of the following modifications to the list of assets and liabilities below would result in a positive net worth?
Home owned $105,000.
Mortgage owed $100,000.
Car valued at $26,000.
Car loan of $22,000.
Investment fund of $4,500.
Savings of $1,500.
Credit card balance of $15,000.
a.
Lowering mortgage by $1,000.
b.
Increasing investment fund by $500.
c.
Adding $100 to savings.
d.
All of the above.
d.
All of the above.
The amount of money in a savings account is an example of which of the following?
a.
investment asset
b.
liquid asset
c.
long term asset
d.
use asset
b.
liquid asset
In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings. Which of the following is a true statement?
a.
The Johnsons increased their liabilities.
b.
The Johnsons increased their liquid assets.
c.
The Johnsons increased their net worth.
d.
The Johnsons increased their use assets.
b.
The Johnsons increased their liquid assets.
Over the period of a year, Julie's net worth decreased. Which of the following could be true?
a.
Julie's assets and liabilities decreased by the same amount.
b.
Julie's assets and liabilities increased by the same amount.
c.
Julie's assets increased by more than her liabilities.
d.
Julie's assets decreased by more than her liabilities.
d.
Julie's assets decreased by more than her liabilities.
The following table shows the assets and liabilities of the Chang family in 2007 and 2008.
Based on the table, which of the following is true?
a.
From 2007 to 2008, both assets and liabilities decreased.
b.
From 2007 to 2008, both assets and liabilities increased.
c.
From 2007 to 2008, assets decreased and liabilities increased.
d.
From 2007 to 2008, assets increased and liabilities decreased.
d.
From 2007 to 2008, assets increased and liabilities decreased.
The Worthingtons love to travel, so when they retired they sold their house and purchased a motor home valued at $165,000. They tow their car, valued at $32,000 behind their motor home when they travel. The Worthingtons have medical bills totaling $1,300 and a balance of $3,000 on credit cards. Since they invested for retirement, the Worthingtons have $200,000 in investments and an additional $20,000 in their savings account. What is the Worthingtons' net worth?
a.
$411,700
b.
$412,700
c.
$413,700
d.
$414,700
b.
$412,700
The Svensons find a refrigerator valued at $2,300 on sale for $1,900. They decided to withdraw $500 from savings to use as a down payment on the purchase of the refrigerator and took out a loan to pay the balance. Choose the true statement.
a.
The Svensons' assets increased by $1,400.
b.
The Svensons' assets increased by $1,800.
c.
The Svensons' assets increased by $1,900.
d.
The Svensons' assets increased by $2,300.
b.
The Svensons' assets increased by $1,800.
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