What Is the First Step in Setting the Foundation for Your

question 43

Multiple Choice

What is the first step in setting the foundation for your financial plan?

• A)Understanding your values and goals
• B)Understanding your current relationship with money
• C)Identifying your current relationship with money
• D)Establishing your mission statement

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Definitions:

Profit or Loss Test

A method used to determine the effectiveness and efficiency of a business by comparing its profits or losses over a specific period.

Asset Test

A means of determining an individual's or entity's ability to meet its financial obligations by comparing its liquid assets against its current liabilities.

Operating Segments

Elements of a corporation for which distinct financial data is obtainable, which the chief operating decision maker reviews routinely to determine resource allocation and to evaluate performance.

Reporting Tests

Procedures or checks utilized to ensure financial information is accurate, complete, and in compliance with regulations.