ACCOUNTING 7 Lecture Notes - Lecture 3: Financial Planner, Passive Income

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wahabzafar0007

5 Jan 2023

School

UT-Dallas

Department

Accounting

Course

ACCOUNTING 7

Professor

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Efficient earnings planning methods

Efficient earnings planning involves taking a strategic approach to managing and

maximizing your income. Here are some methods that can help you plan your earnings

effectively:

1. Set clear financial goals: Determine what you want to achieve financially, such as

paying off debt, saving for retirement, or building an emergency fund. This will help

you focus your efforts and make informed decisions about how to allocate your

income.

2. Create a budget: A budget helps you track your income and expenses, so you can see

where your money is going and identify areas where you can cut costs.

3. Boost your income: Look for ways to increase your income, such as negotiating a

raise or finding a higher paying job. You might also consider starting a side hustle or

investing in assets that generate passive income.

4. Save and invest: Building up your savings and investing in assets such as stocks or

real estate can help you grow your wealth over time.

5. Seek professional advice: If you're not sure how to manage your finances effectively,

consider seeking the advice of a financial planner or advisor. They can help you

create a personalized financial plan and provide guidance on how to achieve your

financial goals.

6. Use automation: Automating your finances can help you stay on track and make it

easier to reach your financial goals. For example, you could set up automatic savings

transfers or use a service like Mint to track your spending and set budget alerts.

7. Make a plan for unexpected expenses: Unexpected expenses can derail even the

best-laid financial plans. To protect yourself, set aside an emergency fund or consider

purchasing an insurance policy to cover unexpected costs.

8. Be mindful of tax implications: Be sure to consider the tax implications of your

earnings planning decisions. For example, contributing to a 401(k) or IRA can help

you save on taxes in the short-term, while investments in a taxable account may be

more tax efficient in the long-term.

9. Use financial tools and resources: There are many tools and resources available to

help you manage your finances more effectively. For example, you could use a

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Related Questions

One reason accounting earnings may not be a realistic measure ofeconomic income is the incentive and ability of business managersto manipulate reported profits for their own benefit. This may beparticularly true when their company has an incentive compensationplan that is linked to reported net income. The manipulation ofearnings known as earnings management frequently involvesincome smoothing. Income smoothing has been defined as thedampening of fluctuations about some level of earnings that isconsidered normal for the company. Research has indicated thatincome smoothing occurs because investors prefer a stable ratherthan a volatile earnings trend.

Discuss why investors prefer stable and consistent earningstrends. Identify ways and methods that business managers might useto smooth earnings

eringnu51

Question 11

The two most useful financial statements are ____ and____.

	A.	federal tax returns; income and expense statements
	B.	balance sheets; wills
	C.	cash-flow statements; balance sheets
	D.	wills; federal tax returns

Question 12

Which of the following is the best example of awell-stated financial goal?

	A.	Pay off your credit cards as soon as possible
	B.	Purchase a three-bedroom home in five years
	C.	Buy a $3,000 computer in 18 months
	D.	Buy a $2,000 stereo

Question 13

The first step in the budgeting process is

	A.	setting financial goals.
	B.	evaluating.
	C.	organizing.
	D.	decision making.

Question 13

The first step in the budgeting process is

	A.	setting financial goals.
	B.	evaluating.
	C.	organizing.
	D.	decision making.

Which of the following is a characteristic of a cash-flowstatement?

	A.	It shows if you were able to live within your income for theperiod covered.
	B.	All of these.
	C.	It covers a period of time, usually one month or one year.
	D.	The statement includes three sections: income, expenses, andsurplus (or deficit).

Question 15

The formula for calculating net worth is

	A.	income minus liabilities.
	B.	assets minus expenses.
	C.	income minus expenses.
	D.	assets minus liabilities.

Question 16

Food, clothing, and entertainment are examples of

	A.	long-term liabilities.
	B.	short-term liabilities.
	C.	fixed expenses.
	D.	variable expenses.

Question 17

To construct a balance sheet, you need to compile dollar valuesfor your assets and liabilities. Good sources from which to beginare

	A.	checkbook or savings account records.
	B.	all of these.
	C.	investments.
	D.	receipts of various payments.

Question 18

Discretionary income is used to pay for things like

	A.	housing.
	B.	vacations.
	C.	utilities.
	D.	food.

Question 19

A short-term goal is one that is projected to be acheived withinhow much time?

	A.	one month
	B.	three months
	C.	one year
	D.	five years

Question 20

The advantages of having organized financial records include

	A.	helping you take advantage of all available tax deductions.
	B.	all of these.
	C.	enabling you to review the results of financialtransactions.
	D.	helping you save money as well as make money.

magentarhinoceros749

Rent and insurance payments are examples of

	A.	variable expenses.
	B.	fixed expenses.
	C.	long-term liabilities.
	D.	short-term liabilities.

Matthew is concerned about his ability to save money regularlyand has prepared a budget. Which of the following budgetclassifications would be most appropriate for Matthew'sbudget?

	A.	Savings as a fixed expenditure
	B.	Saving whatever may be left over
	C.	Savings as a variable expenditure

Question 3

A successful financial plan includes

	A.	explicitly stated financial goals.
	B.	specified values that underlie the plan.
	C.	all of these.
	D.	logical and consistent financial strategies.

Question 4

A cash-flow statement is also known as a(n) ____ statement.

	A.	taxable income
	B.	net worth
	C.	income and expense
	D.	asset-and-liability

Question 5

A long-term goal is one that is projected to be acheived beyondhow much time?

	A.	five year
	B.	ten years
	C.	six months
	D.	one year

Question 6

A balance sheet includes ____, ____, and ____.

	A.	income; expenses; net worth
	B.	assets; expenses; liabilities
	C.	income; liabilities; net worth
	D.	assets; liabilities; net worth

Question 7

Disposable income is income

	A.	after all employer withholding including taxes.
	B.	minus fixed expenditures.
	C.	before taxes.
	D.	after all employer withholding except taxes.

Question 8

Which of the following would be classified as a long-termliability?

	A.	Education loan balance
	B.	Credit card debt
	C.	Bank card debt
	D.	All of these

Question 9

Stephen Scott's monthly pay stub indicates that his monthlygross income is $3,800. However, $800 is withheld for income andSocial Security taxes, $200 is withheld for his health anddisability insurance, and another $200 is contributed to hispension plan. How much is Stephen's disposable income?

	A.	$2,800
	B.	$3,000
	C.	$2,600
	D.	$3,800

Question 10

Which of the following provides information about a person'sfinancial condition at a specific point in time?

	A.	Federal tax return
	B.	Balance sheet
	C.	All of these
	D.	Income and expense statement

Question 11

The two most useful financial statements are ____ and____.

	A.	federal tax returns; income and expense statements
	B.	balance sheets; wills
	C.	cash-flow statements; balance sheets
	D.	wills; federal tax returns

Question 12

Which of the following is the best example of awell-stated financial goal?

	A.	Pay off your credit cards as soon as possible
	B.	Purchase a three-bedroom home in five years
	C.	Buy a $3,000 computer in 18 months
	D.	Buy a $2,000 stereo

Question 13

The first step in the budgeting process is

	A.	setting financial goals.
	B.	evaluating.
	C.	organizing.
	D.	decision making.

Question 13

The first step in the budgeting process is

	A.	setting financial goals.
	B.	evaluating.
	C.	organizing.
	D.	decision making.

Which of the following is a characteristic of a cash-flowstatement?

	A.	It shows if you were able to live within your income for theperiod covered.
	B.	All of these.
	C.	It covers a period of time, usually one month or one year.
	D.	The statement includes three sections: income, expenses, andsurplus (or deficit).

Question 15

The formula for calculating net worth is

	A.	income minus liabilities.
	B.	assets minus expenses.
	C.	income minus expenses.
	D.	assets minus liabilities.

Question 16

Food, clothing, and entertainment are examples of

	A.	long-term liabilities.
	B.	short-term liabilities.
	C.	fixed expenses.
	D.	variable expenses.

Question 17

To construct a balance sheet, you need to compile dollar valuesfor your assets and liabilities. Good sources from which to beginare

	A.	checkbook or savings account records.
	B.	all of these.
	C.	investments.
	D.	receipts of various payments.

Question 18

Discretionary income is used to pay for things like

	A.	housing.
	B.	vacations.
	C.	utilities.
	D.	food.

Question 19

A short-term goal is one that is projected to be acheived withinhow much time?

	A.	one month
	B.	three months
	C.	one year
	D.	five years

Question 20

The advantages of having organized financial records include

	A.	helping you take advantage of all available tax deductions.
	B.	all of these.
	C.	enabling you to review the results of financialtransactions.
	D.	helping you save money as well as make money.

magentarhinoceros749

ACCOUNTING 7 Lecture Notes - Lecture 3: Financial Planner, Passive Income

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