Pulli: Business 102 - Test 8 (Chapter 8)

Warranties may be in writing or may be assumed to exist

True

Enforceable contracts must have a valid offer and acceptance

True

A negotiable instrument is a written promise to pay money upon demand of the holder

True

Consideration in a legally binding agreement means that both parties are 18 or older

False

It is your responsibility as a consumer to keep a copy of each agreement you sign in a safe place for future reference

True

A contract with an illegal purpose is not enforcable

True

A notarized document has a seal that indicates the person signed the document of his or her own free will

True

You can use a spreadsheet program to maintain a list of your income and expenses

True

It is a good idea to keep W-2 statements, receipts, budgets, and tax returns for future reference

True

The person who creates and signs a promissory note is called the maker

True

It is not a good idea to take photographs of your valuables because other people might be able to see your photos

False

Liabilities are things of value that you own

False

When your debts are greater than your assets, you are said to be solvent, or in a favorable credit position

False

Receipts are valuable to use as evidence or proof of payment

True

Keeping good personal records will not help your long-range financial planning

False

Fixed expenses will charge according to your needs and short-term goals

False

An example of a variable expense is entertainment, which can be changed relatively easily

True

Most financial experts recommend that a family have fixed expenses of no more than 50-60% of take home pay set aside for fixed expenses.

True

An organization plan whereby you match expected income with expected outflow is called a net worth statement

False

Disposable income is the money you have to spend or save after taxes and required deductions have been paid

True

Car payments, house payments, and utilities are all examples of

Fixed income

Which of the following is not a reason for financial planning

To prepare your income tax return

A budget

is a plan to match expected income with expected outflow

Families should keep all of the following except

Income and expense records

Shown on your net worth statement are debts you owe to others, known as

Liabilities

Shown on your net worth statement are things of value that you own, known as

Assets

A net worth statement is most commonly used

When applying for credit

Which of these is not required for an enforceable agreement

Notarization

A personal property inventory is most commonly used

as proof of loss in the event of fire or theft

A mortgage or lease is an example of a(n)

Express contract

A warranty that is assumed to exist

Implied

The meaning of the term negotiable instrument

Legally collect

One who agrees to pay a note if the maker does not pay

Co-signer

A document that has a signature verified by a notary public

Notarized

The person whom a note is made payable

Payee

A written promise to pay on a specified date

Promissory note

The difference between assets and liabilities

Net worth

A contract that is in words-oral or written

Express

A new offer based on rejection of part or all the original offer

Counteroffer

Persons who are legally able to give sane and intelligent consent and enter into contracts

Competent parties