The most common accounting method used in personal finance is accrual accounting. True False Question 2 (1 point) Saved Sam wants to know if he can afford the debt he is carrying and, if so, how much leeway he has for assuming more debt. The first thing for him to look at is income statements. cash flow statements. balance sheets. common-size statements. financial ratios. Bankruptcy may occur when there is negative net worth. debts are greater than assets. you default on a loan. a. and b. a., b., and c. Question 4 (1 point) Saved The more skills required for a job, the more people there are to do it, and the less leverage the seller has in negotiating a price. True False Question 5 (1 point) Saved Net income margin will always be less than 1, because net income will always be less than total income. True False To calculate your net income margin to determine how much of your income goes to expenses, you would divide your net income by your total income. total assets. net worth. total debt. net cash flow. Question 7 (1 point) Saved Chance wants to know how big his income is for supporting his assets and relative to his net worth. What should he look at? Net worth in relation to net income Total assets in relation to net income Total debt in relation to net worth a. and b. a., b., and c. A balance sheet is a record of performance over a period of time. True False Question 9 (1 point) Saved The percentages on common-size statements are different from ratios. True False Question 10 (1 point) The relative size of items on common-size statements lets you spot amounts that seem disproportionately large or small. True False