The bottom line of James’s income statement shows a negative number. What does this mean? (1 point)
Responses
He entered the incorrect amount for his rent.
He is spending more money than he makes.
He is not contributing to his 401(k).
He spends $200 a month on clothes.
He is spending more money than he makes.
How can James free up more money to pay down his credit card debt? (1 point) Responses
He has to complete an income statements every month.
He has to cut back on other expenses.
He has to start contributing to his 401(k). He has to start contributing to his 401(k).
He has to pay less in rent each month.
He has to cut back on other expenses.
What is a net worth statement?(1 point) Responses
It is a listing of what an individual owns minus what they owe.
It is an invoice.
It is a listing of an individual’s net income minus their expenses, calculated on a monthly basis.
It is a spending plan based on income and expenses
It is a listing of what an individual owns minus what they owe.
Which of the following may fall under the category of collateral?(1 point)
Responses
a credit card balance of $12,000
a high salary a high salary
an antique vase valued at $125,000
an antique vase valued at $125,000 a previous loan that was repaid in full
an antique vase valued at $125,000 a previous loan that was repaid in full
Which of the following is not one of the Three Cs?(1 point) Responses
capital
capacity
collateral
character
capital
The correct answer is: He is spending more money than he makes.
To determine this answer, you need to understand the concept of an income statement and how it reflects a person's financial situation.
An income statement is a financial statement that shows a person's revenue (income) and expenses over a specific period of time. It helps determine whether a person is making a profit or a loss.
In the given scenario, the bottom line of James's income statement shows a negative number. This means that his expenses are exceeding his income, resulting in a net loss. In other words, he is spending more money than he makes. This negative result indicates financial trouble and might require James to review his expenses and find ways to reduce them or increase his income.