Chapter 2 Test A
The three parts of your balance sheet are
income, liabilities, balance
assets, expenditures, balance
assets, liabilities, balance
d. assets, liabilities, net worth
income, liabilities, net worth
Sam and his wife Ann purchased a home in Lubbock, Texas in 1980 for $100,000. Their original home
mortgage was for $90,000. The house has a current market value of $175,000 and a replacement value of
$200,000. They still owe $55,000 on their home mortgage. Sam and Sally are now constructing their balance
sheet. How should their home be reflected on their current personal balance sheet?
$200,000 asset and $55,000 liability
$200,000 asset and $90,000 liability
c. $175,000 asset and $55,000 liability
$175,000 asset and $90,000 liability
$100,000 asset and $55,000 liability
Jacque's total monthly loan payments are $1,020 while her gross income is $3,000 per month. What is her
debt service ratio?
To determine how effectively the budget is working, you can use
the balance sheet.
the income statement.
income and expenditure records.
year-end financial statements.
Michael and Sandy purchased a home for $100,000 five years ago. If it appreciated 6% annually, what is it