Question

1. which statement shows a company’s revenues and expenses over time?

a. balance - sheet
b. statement of shareholders’ equity
c. income statement
d. cash flow statement

1. what is a credit limit?

a. the maximum time to pay back a loan
b. the minimum amount due on a credit card
c. the maximum amount you can borrow on a credit card
d. the number of loans you can have at once

1. a lien is:

a. a type of bank account
b. a legal claim on property for unpaid debt
c. a company’s net income
d. a credit score over 700

1. diversification in investing is best described as:

a. avoiding all stocks
b. putting all your money into one investment
c. spreading investments to reduce risk
d. investing only in cash

1. which best defines liquidity?

a. the ability to reduce interest
b. the amount of debt someone has
c. the ease of converting assets into cash
d. the risk of an investment

1. a money market deposit account typically:

a. offers lower interest than a savings account
b. has no withdrawal restrictions
c. offers higher interest than a checking account
d. is used only for business loans

1. which of the following is a liability?

a. retirement savings
b. a car loan
c. home equity
d. a savings account

Explanation:

1. The income statement shows revenues and expenses over a period of time.
2. A credit limit is the maximum amount you can borrow on a credit card.
3. A lien is a legal claim on property for unpaid debt.
4. Diversification in investing means spreading investments to reduce risk.
5. Liquidity is the ease of converting assets into cash.
6. A money - market deposit account typically offers higher interest than a checking account.
7. A liability is an obligation that requires future payment. A car loan is a liability as you owe money.

Answer:

1. C. Income statement
2. B. The maximum amount you can borrow on a credit card
3. B. A legal claim on property for unpaid debt
4. C. Spreading investments to reduce risk
5. B. The ease of converting assets into cash
6. C. Offers higher interest than a checking account
7. B. A car loan