Review questions

Review questions

Test your understanding with these questions. Marking and saved results are available with a free account.

1. Question 1In a hypothetical case, net income is 4,800, fixed expenses 2,700, variable expenses 1,150, and planned maintenance of 1,200 is due in a year with no prior provision. What is the monthly surplus after preparing for maintenance?

   850 units 950 units 750 units 2,000 units
2. Question 2A household knows that a school fee of 2,400 is due in twelve months and has nothing reserved for it. Which treatment gives a more dependable monthly surplus estimate?

   Treat the fee as an unforeseeable emergency and draw on the emergency fund. Ignore the fee until it appears on the statement in its due month. Reserve 200 each month for the fee and keep the emergency fund separate. Subtract 2,400 every month for the entire year to be safe.
3. Question 3Hypothetical case: 3,200 arrives on day 1 and 1,600 on day 16. Before day 16, rent of 1,700, a periodic insurance payment of 900, utilities of 420 and food of 500 fall due. The month starts with no accessible cash balance. Although total monthly income is 4,800, what is the soundest decision before the due dates?

   Treat a positive monthly total as sufficient and skip the date check. Arrange at least 320 of liquidity before day 16 or seek an agreed change to a due date early. Automatically delay rent until day 16 because the second pay is expected. Add the future 1,600 to the day 1 balance as if it had arrived.
4. Question 4A hypothetical month opens with 200. Income of 2,800 arrives on day 1; 1,600 leaves on day 3, 350 on day 6 and 1,200 on day 9; then 2,200 arrives on day 15. What is the lowest balance through day 15?

   1,400 −150 1,050 2,050
5. Question 5In a hypothetical calendar, monthly income is 4,900 and payments 4,200; opening balance is 100 and closing balance 800. Yet the balance on day 12 falls to −50 before income arrives on day 18. Which conclusion follows from the data?

   There is a permanent monthly deficit of 50 requiring that much additional income each month. There is no problem because closing balance is positive; day 12 can be ignored. There is a temporary liquidity gap of at least 50 before day 18 despite a 700 monthly surplus. The day 12 balance becomes positive if day 18 pay is counted as day 12 income.
6. Question 6In a hypothetical calendar, the lowest balance before day 18 is −80 on day 12, no balance before day 11 falls below 40, and closing balance is 600. A flexible purchase of 120 on day 11 can be moved without fees to day 20. If all else stays the same, what follows?

   The early low becomes 40 and the close stays 600 once the purchase is recorded on day 20. The early low becomes 40 and the close rises to 720. The gap stays −80 because the month's total expenses do not change. The early balance becomes 120 because the purchase is delayed several days.
7. Question 7Hypothetical net income of 6,000 units falls 15% next month. What new income should enter the budget?

   900 5,400 6,900 5,100
8. Question 8In a hypothetical case, income becomes 5,100 instead of 6,000 and old planned use is 5,650. Personal items fall from 500 to 200 and entertainment from 300 to zero; other lines stay the same. What is the revised result?

   A 50 surplus because new use is 5,050. A 550 deficit because cuts cannot affect this month. A 600 surplus because that is the amount cut. A 50 deficit because income fell by 900.
9. Question 9New income is 4,420 and old use 4,700. Rent, utilities, work transport, a loan minimum of 500 and food total 4,050; clothing is 350 and entertainment 300. Which revision leaves a 70 surplus without hiding an obligation?

   Keep every line and merely label the deficit temporary. Delete the 500 loan minimum without contacting the party owed. Reduce clothing to 200 and entertainment to 100 while keeping the first five lines. Treat the 350 clothing cost as extra income instead of changing spending.
10. Question 10In a hypothetical monthly record, food was planned at 850 units and actual food use was 920. If expense variance is defined as actual minus planned, what is the variance?

    −70 because planned was below actual. +70, spending above plan. +1,770, the sum of both figures. Zero because the category is still food.
11. Question 11Planned and actual income are both 4,600. Planned use totals 3,700 and actual use 3,830. What is surplus variance, defined as actual surplus minus planned surplus?

    +130 +770 −130 −900
12. Question 12In a hypothetical case, food is 150 above plan, while transport is 40 lower because one trip was cancelled. The household does not yet know why food rose. What is the soundest next review action?

    Permanently cut transport by 40 and assume food rose because of waste. Move 150 from food to miscellaneous so food matches its target. Raise every budget category by 150 because prices often rise. Inspect food receipts for the cause, test a trackable target, and leave transport at its usual level until the change repeats.

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