Business Finance Final Exam
A cash flow statement gives you important feedback on your
income and spending patterns
Which of the following is not an asset category on the balance sheet
long term assets
Compared with commercial banks, credit unions generally offer
lower fees and loan rates
Renting is often a wise choice for someone who wants
mobility
All of the following are factors one should consider when deciding how much life insurance to have except
number of pets
The listing price is the amount that the
owner asks for the house
credit card holders are known as convenience users when they
pay off monthly balances
your net worth goes up when you
pay off previous debts
what might a buyer do to get a lower interest rate?
pay points
the trade off made by making one choice instead of another is commonly referred to as
perpetual cause
A lender may ask a buyer to deposit money in an escrow account for paying
property taxes
A disadvantage of renting
restrictive activities
which is not an advantage of credit
temptation to buy more than you can afford
Using credit may increase the amount of money you can spend now, but the cost of credit decreases the amount of money you will have in the future
true
When you borrow money or pay for items over time, interest is working against you
true
a deficit is when more money is spent than earned
true
a homeowners insurance policy protection includes losses caused by fire, water damage, storm, theft, and other perils
true
a legal document that describes the conditions of a rental agreement is a lease
true
a taxpayer can't claim a personal exemption on his/her own tax return when he/she can be claimed as a dependent on another taxpayer's return
true
an asset can also be a liability
true
credit cards are the most popular source of consumer credit
true
overdraft protection is an automatic loan made to an account in case the balance doesn't cover the checks
true
retained earnings are profits a company reinvests for expansion or research development
true
the appeal of investing in high risk stocks is the possibility of large returns
true
the higher the standard deduction amount, the lower the taxable income
true
the higher your deductible the lower your premiums are
true
the main purpose of the Fed is to regulate money supply in the US economy
true
values are the beliefs and principals you consider to be correct or desirable
true
An example of a open end credit is
credit cards
Which option is available for a taxpayer receiving a refund
direct deposit
An example of a variable expense is
electric bills
All employers offer group health coverage to all of their employees
false
Consumer spending can only affect the economy in a positive way
false
Employees send there payroll taxes directly to the federal govt
false
Gross pay is the amount of money the employee takes home
false
Life insurance is a binding legal contract between the insured and the insurer to protect the insured, their home, and belongings if they are damaged or destroyed
false
Private Mortgage Insurance is a special policy that protects the lender in case the buyer cant make payments
false
Tax benefits are an advantage of renting a house
false
You should include bonus's you might get at work when you estimate your income
false
saving money for the holidays is an example of a long term goal
false
when company earnings fall below what investors have expected it is common for stock prices to rise
false
A restrictive endorsement allows you to transfer a check to an organization or another person
false
A security deposit is money you pay the landlord for a security system
false
a car payment will be recorded in which section of the monthly cash flow statement
fixed expenses
Personal bankruptcy is reported on your credit report for
10 years
what year did banking for america begin?
1791
Stock market crashing
1929
social security tax rate
6.2
The goal of investing is to receive the original investment back with a return
True
Employers use which form to compute the amount of federal income tax to withhold
W4
series of equal regular deposits is called
an annuity
when writing a check, include all of the following except
an endorsement on the back
the cost of credit on a yearly basis, expressed as a percentage
annual percentage rate
This person, or legal entity, such as a charity, is designated to receive the death benefit
beneficiary
you will earn higher interest rate when you
buy a certificate of deposit
taking responsibility for someones loan
co-signing
This covers damages to your car from a collision
collision coverage
earning interest on previously earned interest
compounding
A borrower is a credit card holder who does not pay off his/her balances in full each month
true
A mortgage is an example of a closed end credit
true
A secured loan is one guaranteed to be repaid through safe collateral
true
A taxpayer and his/her spouse can each claim a personal exemption
true
Equity is the value of a home less the amount still owed on the loan
true
Group health insurance is a valuable employee benefit because the employer pays part of your premium for your insurance
true
Having a budget and using a cash flow statement can help you anticipate shortages and surpluses
true
Some people lost faith in the banking system before the Federal Bank Reserve was in place because the bank did not have enough to pay depositors
true
The Federal reserve is divided into 12 districts representing regions within the country. Each has their own dates.
true