bank statements, credit statements, and records of cash expenses help you to estimate your ________.
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Budgeting
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7th
7th
Budgeting - Everfi
lydia clarke 15 plays
14 Qs
Show Answers See Preview 1. Multiple-choice 1 minute Q.
Which of the following is a benefit of using a budget?
answer choices
Helps to keep track of the money you receive
Helps to prioritize your spending
Helps reach short- and long-term financial goals
All of the above 2. Multiple-choice 1 minute Q.
Which of the following is NOT a benefit of using a budget?
answer choices
A budget can help you purchase anything you want.
A budget can help you keep track of your money.
A budget can help you make plans to reach your financial goals.
A budget can help you decide the importance of your expenses.
3. Multiple-choice 1 minute Q.
Which of the following should NOT be considered when setting a current budget?
answer choices
Your financial goals
Future income Needs and wants Savings 4. Multiple-choice 1 minute Q.
What should be considered when setting a budget?
answer choices Needs and wants Savings
Time management goals
Needs, wants, and savings
5. Multiple-choice 1 minute Q.
Bank statements, credit statements, and records of cash expenses help you to estimate your ________.
answer choices credit score
emergency fund needs
expenses
available investments
6. Multiple-choice 1 minute Q.
In addition to needs, what should you plan for first when creating a budget?
answer choices
Possible charitable donations
Shopping money Investments Recurring expenses 7. Multiple-choice 1 minute Q.
Which of the following statements is TRUE?
answer choices
a) Recurring expenses don't need to be planned for because they rarely happen.
b) Recurring expenses are expenses that can never be stopped.
c) Recurring expenses should be planned for after looking at your wants.
d) None of the above
8. Multiple-choice 1 minute Q.
Which choice or choices best describes the purpose of an emergency fund?
answer choices
a) An emergency fund prepares you for unexpected expenses.
b) An emergency fund keeps you from borrowing money from friends and family.
c) An emergency fund removes the worry about expenses not in the budget.
d) All of the above are good reasons to have an emergency fund.
9. Multiple-choice 1 minute Q.
This helps you prepare for unexpected expenses
answer choices Credit cards Checking account Emergency fund None of the above 10. Multiple-choice 1 minute Q.
When setting a budget, you can choose to make room for
answer choices Financial goals
Entertainment expenses
Charitable donations
All of the above 11. Multiple-choice 1 minute Q.
Charitable donations, entertainment expenses, and financial goals are all examples of...
answer choices
activities that contribute to overspending
things that are considered needs
activities that are necessary for a healthy lifestyle
things to consider when creating a budget.
12. Multiple-choice 1 minute Q.
When setting a budget, you should consider...
answer choices
a) financial goals, current expenses, and income.
b) mostly income.
c) creative ways to spend your money.
d) mostly your goals.
13. Multiple-choice 1 minute Q.
Unexpected expenses…
answer choices
a) can make it hard to stick to your budget.
b) may cause you to be unable to pay necessary bills.
c) should be planned for.
d) all of the above 14. Multiple-choice 1 minute Q.
An unanticipated expense that will make it difficult to get by day-to-day would be a candidate for…
answer choices
a) spending money from your “rent” envelope.
b) emergency fund spending.
c) tracking all of the money you spent in a month.
d) getting an extra job so you can have money to cover that expense.
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Lesson 3
Start studying Lesson 3 - Budgeting. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
Lesson 3 - Budgeting
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Which of the following is a benefit of using a budget?
a. Helps to keep track of the money you receive
b. Helps to prioritize your spending
c. Helps reach short- and long-term financial goals
d. All of the above
Click card to see definition 👆
d
Click again to see term 👆
Which of the following is NOT a benefit of using a budget?
a. a budget can help you purchase anything you want.
b. a budget can help you keep track of your money.
c. a budget can help you make plans to reach your financial goal.
d. a budget can help you decide the importance of your expenses.
Click card to see definition 👆
a
Click again to see term 👆
1/30 Created by chloemacy
Terms in this set (30)
Which of the following is a benefit of using a budget?
a. Helps to keep track of the money you receive
b. Helps to prioritize your spending
c. Helps reach short- and long-term financial goals
d. All of the above d
Which of the following is NOT a benefit of using a budget?
a. a budget can help you purchase anything you want.
b. a budget can help you keep track of your money.
c. a budget can help you make plans to reach your financial goal.
d. a budget can help you decide the importance of your expenses.
a
Why is using a budget beneficial?
a. helps to keep track of the money you receive.
b. helps to prioritize your spending.
c. helps reach short- and long-term financial goals.
d. All of the above.
d
Which of the following should NOT be considered when setting a current budget?
a. your financial goals
b. future income c. needs and wants d. savings b
Which of the following should you consider when setting a budget?
a. your financial goals
b. needs and wants c. savings d. all the above d
What should be considered when setting a budget?
a. needs and wants b. savings
c. time management goals
d. needs, wants, and savings
d
______________ are good places to look to find your current expenses when building your budget.
a. banks and credit unions
b. grocery stores and concerts
c. banks and credit statements
d. online research websites
c
Where should you look to find our current expenses when building your budget?
a. ask your parents b. your wallet
c. bank and credit statements
d. your bank representative
c
Bank statements, credit statements, and records of cash expenses help you to estimate your __________________.
a. credit score
b. emergency fund needs
c. expenses
d. available investments
c
In addition to needs, what should you plan for first when creating a budget?
a. possible charitable donations
b. shopping money c. investments
d. recurring expenses
d
In your budgeting process, when should you look at recurring expenses?
a. before reviewing your wants
b. after considering entertainment expenses
c. before looking at your needs
d. after your wants but before your needs
a
Which of the following statements is TRUE?
a. recurring expenses don't need to be planned for because they rarely happen.
b. recurring expenses are expenses that can never be stopped.
c. recurring expenses should be planned for after looking at your wants.
d. none of the above.
d
Which of the following is a way to track your spending?
a. spreadsheet budget
b. envelope method c. an app d. all of the above d
The envelope method, notebook and pencil, and online software are all methods of _______________.
a. planning for you future
b. understanding your current expenses
c. estimating your unexpected expenses
d. tracking your spending
d
Which of the following is NOT a good way to track your spending?
a. in your head
b. notebook and pencil
c. envelope method
d. online software or app
a
Which choice or choices best describes the purpose of an emergency fund?
a. an emergency fund prepares you for unexpected expenses
b. an emergency fund keeps you from borrowing money from friends and family
c. an emergency fund removes the worry about expenses not in the budget.
d. All of the above are good reasons to have an emergency fund.
d
Which of the following is NOT true about emergency funds?
a. they are used for anything listed on the budget.
b. they can keep you from borrowing money from friends and family.
c. they can help you prepare for unexpected expenses.
d. they can help remove the worry about expenses not n the budget.
a
This helps you prepare for unexpected expenses.
a. credit cards b. checking account c. emergency fund
d. none of the above
c
When setting a budget, you can choose to make room for:
a. financial goals
b. entertainment expenses
c. charitable donations
d. all of the above d
Charitable donations, entertainment expenses, and financial goals are all examples of ...
a. activities that contribute to overspend
Cash Flow Statement: What It Is and Examples
Understanding cash flow statements is important because they measure whether a company generates enough cash to meet its operating expenses.
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The cash flow statement (CFS), is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that come in and go out of a company. The CFS measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. As one of the three main financial statements, the CFS complements the balance sheet and the income statement. In this article, we’ll show you how the CFS is structured and how you can use it when analyzing a company.
KEY TAKEAWAYS
A cash flow statement summarizes the amount of cash and cash equivalents entering and leaving a company.
The CFS highlights a company's cash management, including how well it generates cash.
This financial statement complements the balance sheet and the income statement.
The main components of the CFS are cash from three areas: Operating activities, investing activities, and financing activities.
The two methods of calculating cash flow are the direct method and the indirect method.
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What Is a Cash Flow Statement?
How the Cash Flow Statement Is Used
The cash flow statement paints a picture as to how a company’s operations are running, where its money comes from, and how money is being spent. Also known as the statement of cash flows, the CFS helps its creditors determine how much cash is available (referred to as liquidity) for the company to fund its operating expenses and pay down its debts. The CFS is equally as important to investors because it tells them whether a company is on solid financial ground. As such, they can use the statement to make better, more informed decisions about their investments.
Structure of the Cash Flow Statement
The main components of the cash flow statement are:
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Disclosure of non-cash activities, which is sometimes included when prepared under generally accepted accounting principles (GAAP).1
Cash from Operating Activities
The operating activities on the CFS include any sources and uses of cash from business activities. In other words, it reflects how much cash is generated from a company’s products or services.
These operating activities might include:
Receipts from sales of goods and services
Interest payments Income tax payments
Payments made to suppliers of goods and services used in production
Salary and wage payments to employees
Rent payments
Any other type of operating expenses
In the case of a trading portfolio or an investment company, receipts from the sale of loans, debt, or equity instruments are also included because it is a business activity.
Changes made in cash, accounts receivable, depreciation, inventory, and accounts payable are generally reflected in cash from operations.
Cash from Investing Activities
Investing activities include any sources and uses of cash from a company’s investments. Purchases or sales of assets, loans made to vendors or received from customers, or any payments related to mergers and acquisitions (M&A) are included in this category. In short, changes in equipment, assets, or investments relate to cash from investing.
Changes in cash from investing are usually considered cash-out items because cash is used to buy new equipment, buildings, or short-term assets such as marketable securities. But when a company divests an asset, the transaction is considered cash-in for calculating cash from investing.
Cash from Financing Activities
Cash from financing activities includes the sources of cash from investors and banks, as well as the way cash is paid to shareholders. This includes any dividends, payments for stock repurchases, and repayment of debt principal (loans) that are made by the company.
Changes in cash from financing are cash-in when capital is raised and cash-out when dividends are paid. Thus, if a company issues a bond to the public, the company receives cash financing. However, when interest is paid to bondholders, the company is reducing its cash. And remember, although interest is a cash-out expense, it is reported as an operating activity—not a financing activity.
How Cash Flow Is Calculated
There are two methods of calculating cash flow: the direct method and the indirect method.
Direct Cash Flow Method
The direct method adds up all of the cash payments and receipts, including cash paid to suppliers, cash receipts from customers, and cash paid out in salaries. This method of CFS is easier for very small businesses that use the cash basis accounting method.
These figures can also be calculated by using the beginning and ending balances of a variety of asset and liability accounts and examining the net decrease or increase in the accounts. It is presented in a straightforward manner.
Most companies use the accrual basis accounting method. In these cases, revenue is recognized when it is earned rather than when it is received. This causes a disconnect between net income and actual cash flow because not all transactions in net income on the income statement involve actual cash items. Therefore, certain items must be reevaluated when calculating cash flow from operations.
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