CTFA

CTFA practice questions, page 8 of 35, with answer review and explanations.

Question 36

Tangible assets that are immovable: land and anything fixed to it, such as a house is a person's:

  1. Investment
  2. Real property
  3. Liability
  4. Open credit obligation

Question 37

It is actually a method of preparing financial statements in which only transactions involving actual cash outlays are recorded.

  1. Cash basis
  2. Expense
  3. Equity
  4. Cash deficit

Question 38

An excess amount of expense over income resulting in insufficient funds as well as in decreased net value is called:

  1. Cash deficit
  2. Limited Liability
  3. Cash basis
  4. Net worth

Question 39

Total liquid assets divided by total current debts; measures the ability to pay current debts. It is:

  1. Solvency ratio
  2. Liquidity ratio
  3. Savings ratio
  4. Debt service ratio

Question 40

Total net worth divided by total assets; measures the degree of exposure to insolvency is:

  1. Solvency ratio
  2. Liquidity ratio
  3. Savings ratio
  4. Debt service ratio