Finance

Mike Hansen has adjusted gross income of $28,000. During the year, Mike decided he needed a larger home. He purchased a home on a golf course in the same town as his first home. Mike incurred $7,500 in moving expenses. How much of this can he deduct from adjusted gross income?

$0

The Federal Deposit Insurance Corporation insures deposits up to $250,000 per person per financial institution. Suzanne has $200,000 in an individual account and $424,000 in a joint account with her husband, Ted. How much of Suzanne's money is not covered by FDIC insurance?

$162,000

Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500. She has recently purchased a 2-year certificate of deposit worth $5,500 and she has a retirement account worth $38,550. What is the total value of her assets?

$171,900

Patricia McDonald has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500 and owes $7,800 on her auto loan. She has also purchased some stock worth $5,500 and she has a retirement account worth $38,550. What is the total value of her assets?

$171,900

Jamie McFarland has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000, and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000. What is the total value of her assets?

$267,500

During the past month, Jennifer Ernet had income of $3,000. During the month, her net worth declined by $200. If no other financial activities occured, this means Jennifer's payments for the month were:

$3,200

A tax credit of $50 for a person in a 28 percent tax bracket would reduce a person's taxes by:

$50

Joseph is eligible for a nontaxable life insurance benefit with an annual premium of $400 paid entirely by his employer. Assuming Joseph is in a 25% bracket, how much would he have to earn to pay for this benefit with after-tax dollars?

$533.33

Michele Walsh is considering an additional charitable contribution of $2,000 to a tax-deductible charity, bringing her total itemized deductions to $16,000. If Michele is in a 28 percent tax bracket, how much will this $2,000 contribution reduce her taxes?

$560

You are planning to buy a house in five years. How much do you need to deposit today to have a $10,000 down payment if your investment will make 6%?

$7,740

Sue deposited $1,000 in an account paying 3 percent interest. The inflation rate is 5 percent. What is the buying power of the account after one year?

$980

Affan Chawdry has monthly net income of $1,050. He has a house payment of $450 per month, a car loan with payments of $250 per month, a Visa card with payments of $50 per month, and a credit card with a local department store with payments of $100 per month. What is Affan's debt payments-to-income ratio?

0.38

A person borrows $200 from a payday loan company, and pays $10 interest for two weeks. This would result in an annual interest rate of approximately ___ percent. Ignore compounding.

130

When you complain about your billing error, the creditor must acknowledge your letter within _____ days.

30

Which of the following is an opportunity to contact several firms in a short time span? It is often held at local universities or convention centers.

A career fair

____ is a benefit on which you pay no taxes.

A tax-exempt benefit

Which of the following would be a competency commonly associated with successful people?

All of the above are competencies commonly associated with successful people

Many taxpayers with high incomes and high amounts of deductions must pay an additional tax referred to as the ____ tax.

Alternative minimum

Natural abilities that people possess are called:

Aptitudes

The problem of bankruptcy is associated with poor decisions in the _____ component of financial planning.

Borrowing

Lisa Trotter wants to gain some needed experience so when she is ready to start a career she has something to offer a company. She has decided to help with the homecoming parade for the University of Central where she goes to school full-time. Which of the following employment strategies is she pursuing?

Campus Project

Which one of the following is defined as a commitment to a profession that requires continued training & offers a clear path for occupational growth?

Career

A _____ resume presents a person's education, work experience, and other information in a reverse time-sequence.

Chronological

Amy Farmer is getting a loan to buy a used car. The bank wants to know the trade-in value of the car she is purchasing. Which of the 5 Cs of credit is the bank examining?

Collateral

Jeff Willis has a budget that he follows each month. He has used Microsoft's Money to help him determine what he wants to spend each month. At the end of the month, Money automatically compares what he budgeted with what he spent. Jeff can also graph these results if he wants to. What type of budget has Jeff created?

Computerized budget

Melanie Walsh likes to go to the movies once a week. When she is at the movies, she generally gets a large popcorn and a drink. Melanie wants to be sure that she sets aside money each week so she can continue going to the movies. What type of goal would this be for Melanie?

Consumable-products goal

During __________, even though prices decline spending slows because consumers expect prices to continue to decline.

Deflations

Which federal consumer credit law prohibits credit descrimination based on sex and marital status?

Equal Credit Opportunity Act

Which federal law requires creditors to inform applicants of acceptance or rejection of their credit application within 30 days of recieving a completed application?

Equal Credit Opportunity Act

Jason Liang has gotten three job offers. He is now looking at the benefits packages of all three to see what he likes and doesn't like. Which step in the career planning process is Jason completing?

Evaluate financial & other factors of positions offered

Lynn Roy knows that if she continues to work full time, it will be difficult for her to get the time off she needs to be able to travel around the world. However, if she continues to work full time she will more easily earn the money she needs to take her trip and still have money left for her living expenses after she gets back from her trip. Which step in the financial planning process does this scenario demonstrate?

Evaluating her alternatives

Which federal credit law protects you against an unauthorized use of your credit card?

Fair Credit Billing Act

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Fair Credit Billing Act

A financial plan is another name for a budget.

False

Economics is the study of using money to achieve financial goals.

False

If expenses for a month are greater than income, an increase in net worth will result.

False

Money management activities refer to long-term investment decisions.

False

Most consumers have only one choice in financing current purchases.

False

Present value is also referred to as compounding.

False

Tax avoidance refers to illegal actionst to reduce one's taxes.

False

There are very few valid reasons for using credit.

False

When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance.

False

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

False

Which form would an individual use who has less than $100,000 in taxable income from wages, salaries, tips, unemployment compensation, interest or dividends, and who is married and does not itemize deductions?

Form 1040A

A person who has worked in many fields & has a variety of skills in categories such as communications, research, & personal administration would probably be best served with the use of a ______ resume.

Functional

If you put $1,000 in a saving account & make no further deposits, what type of provide you with the value of the account in 20 years?

Future value of a single amount

The purpose of an informational interview is to:

Gather information about a firm or for career planning

Jeremy Irons has done some research & has discovered that the states with the largest population growth are Colorado & Arizona. Based on his findings, Jeremy believes these states will experience greater job growth as a result. This is an example of ____ influencing jobs in the future.

Geographic trends

John Gleason is interested in purchasing a 46" rear projection TV for his living room. John knows that right now the TV will cost apporximately $1,500. John is not sure he can afford this TV right now but is worried that if he waits, the cost of the TV will rise to $1,800. Which type of risk is John worried about?

Inflation risk

Mary Sheets is considering investing in 30 year Corporate Bonds issued by Duke Energy Company. She knows that she will earn an interest rate of 8% by purchasing these bonds. However, she is concerned because she might need to take her money out of this investment in a year and she has heard that she might have to sell the bonds at a significantly lower price than she will purchase them for. What type of risk is Mary concerned about?

Liquidity risk

Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to:

Liquidity risk

As Jean Tyler plans to set aside funds for her young children's college education, she is setting a(n) _______ goal.

Long-term

For an entry-level position, a person's resume is likely to be:

One page

Earnings from a limited partnership would be an example of _____ income.

Passive

Jonathan Wynn has developed a budget that he follows each month. Jonathan has an envelope for each type of expenditure. After he cashes his paycheck, he puts the amount of cash in each envelope that he plans to spend on that catergory each month. What type of budget has Jonathan created?

Physical budget

The purpose of a selection interview is to:

Question candidates for a job in detail

The purpose of a screening interview is to:

Reduce the number of applicants for a job

The financial planning process concludes with efforts to:

Review and revise your actions

The uncertainty associated with decision making is referred to as:

Risk

Which of the following is an example of opportunity cost?

Saving money instead of taking a vacation

Which of the following would be an example of a personal and employment document?

Social Security Card

Mr. and Mrs. Keating want to give their son Dudley a total of $24,000. They each write him a check for $12,000 so they wont have to pay any gift tax. This is an example of:

Tax avoidance

Which of the following is a benefit on which you pay taxes at some future date?

Tax-deferred benefit

A home equity loan is usually set up as a revolving line of credit, typically with a variable interest rate.

True

A mentor is an experienced employee who serves as a teacher & counselor for a less experienced person in a career field.

True

A person's birth date, sex, height, and weight should only be included on a résumeé if that information relates specifically to qualifications for an employmet position.

True

A person's filing status is affected by marital status and dependents.

True

A person's net worth is the difference between the value of the items owned and the amounts owed to others.

True

A personal cash flow statement presents income and outflows of cash for a given time period, such as a month

True

A tax credit is an amount subtracted directly from the amount of taxes owed.

True

A tax on the value of automobiles, boats, or furniture is referred to as a personal property tax.

True

Analyzing your current financial position is a part of the first stage of the financial planning process.

True

Closed-end in credit is used for a specific purpose and involves a specified amount.

True

Continuing career education can be in a formal or an informal setting.

True

Credit bureaus obtain their data from banks, finance companies, merchants, credit card companies, other creditors, and court records.

True

Credit when effectively used, can help you have more and enjoy more.

True

Debit cards are often called bank cards, ATM cards, cash cards, and check cards.

True

In the 5 Cs of credit, character refers to the borrower's attitude toward credit obligations.

True

Installment cash credit is a direct loan of money for personal purposes, home improvements, or vacation expenses.

True

Installment sales credit is a loan that allows you to recieve high-priced items, such as large appliances or furniture.

True

Libraries usually have a variety of information sources for career planning and job exploration.

True

Opportunity costs refer to time, money, & other resources that are given up when a decision is made.

True

Opportunity costs refer to what a person gives up when making a decision.

True

Real-estate property taxes are a major source of revenue for local governments.

True

The Fair Credit Reporting Act regulates the use of credit reports, requires the deletion of obsolete information, and gives consumers access to their files.

True

The credit cardholders who pay off their balances in full each month are known as convience users.

True

The larger the debt-to-equity ratio, the riskier the situation is for lenders and borrowers.

True

When one money management decision is made, an alternative must be given up.

True

Which federal law prohibits credit card issuers from sending unrequested cards?

Truth in Lending Act

Which type of audit is the least complicated for taxpayers?

a correspondence audit

Nick Boss has a savings account with $550 in it. He knows that he can withdraw this money whenever he wishes. This would be an example of:

a liquid asset

Efficient work habits are an example of:

an employee's initiative

The amount of interest is determined by multiplying the amount in savings by the:

annual interest rate and the time period

Mathematical abilities, problem-solving skills, and physical dexterity are examples of:

aptitudes

If your credit application is denied, you:

are entitled to know the specific reason you were denied credit

Which one of the following illustrates an insolvent situation?

assets $40,000: liabilities $45,000

To determine a person's solvency, which financial document should be consulted?

balance sheet

David Wynn gets a personal loan from his credit union for $1,000. David will make monthly payments of $85.15 over the next year to repay the loan. What type of financial service is David using?

borrowing service

The debt payments-to-income ratio is:

calculated by dividing monthly debt payments (not including house payments) by net monthly income

A bank that is looking at your past payment records on your loans is most likely examining which aspect of teh 5 Cs of lending?

character

Charles Rickman is applying for a loan from the bank. The bank determined that he has never been late making payments on past loans. Which of the 5 Cs of credit is the bank looking at?

character

Mortgage loans, automobile loans, and installment loans for purchasing furniture or appliances are examples of:

closed-end credit

A valuable asset pledged to assure loan payments and subject to seizure upon default is called:

collateral

Which of the following is a deposit institution?

credit union

A cash flow statement reports a person's or a family's:

current income and payments

Ben Chase needs tp pay off some of hsi debts over the next few months. Which item on his balance sheet would help him decide what amounts are due in the near future?

current liabilities

For January, Bethany DeWeese had cash inflows of $4,200 and cash outflows of $4,750, resulting in a

deficit of $550

Kelly Vernon wants her tax return prepared by a government approved tax expert. Which of the following tax preparers should Kelly use?

enrolled agent

The state of Oklahoma imposes a tax of $.17 per gallon of gasoline. What type of tax is this most likely to be?

excise tax

Maryellen Epplin worked in Poland for part of the year and earned $50,000 while she was there. This income will not be included in her taxable income for the year. This represents a tax:

exclusion

A decrease in net worth could be the result of:

expenses exceeding income for a month

Ed Bostrom wants to reduce his fixed expenses. Which action would be appropriate?

find a place to live with a lower rent

When it comes to savings, most Americans:

find saving difficult

A lack of willingness to accept a variety of employment positions is a common career planning mistake associated with a lack of:

flexibility

A functional resume is best for a person who:

has diverse skills

Most people pay federal income tax by:

having amounts withheld from income

The purpose of the development section of a cover letter is to:

highlight background that qualifies the applicant for a specific job.

A debit card:

immediately deducts the cost of your purchase from your bank account

Which one of the following is the best example of a long-term goal for a young couple?

income for retirement

Drew Davis earns $4,500 per month from his job at Cisco System; $900 is withheld from this amount each month for taxes. What type of tax is this most likely to be?

income tax

Higher prices are likely to result from:

increased spending by consumers without increased production.

The time value of money refers to:

increases in an amount of money as a result of interest

Which CD pays earnings based on the stock market?

indexed

The Form 1040 is most helpful to a person who:

itemizes deductions

The term networking refers to:

making & using contacts to obtain & update career information

Stored value (or gift) cards:

may be eroded by fees and eventually expire

A common criticism of including a career objective on a resume is that it:

may be too vague

Jennifer Rodrick uses a computer to help her record her spending each month. She updates her records weekly. This would be an example of:

money management

Which one of the following savings plans is not covered by federal deposit insurane?

money market fund with an investment company

Which of the following represent the use of credit?

mortgage

Which of the following would be considered a long-term liability?

mortgage

Which of the following would be considered a fixed expense?

mortgage payment

Which one of these investments produces tax-exempt income?

municipal bond

A person with a total tax liability of $4,350 and withholding of fedeal taxes of $3,975 would:

owe $375

Jennifer Ryan wants to gain some employment experience so when she is ready to start a career she has something to offer a company. She has decided to work 20 hours a week for a local accounting firm answering the phone and assisting the partners in completing tax returns. Which of the following employment experience strategies is she pursuing?

part-time employment

Tom Bridges owns a bass fishing boat. His state imposes an annual 3.25 percent tax on the current value of his boat. What type of tax is this most likely to be?

personal property tax

The final step of the career planning process is to:

plan for career development

To assess the current value of a lump-sum retirement benefit that will be received in 10 years, use the _____ calculation.

present value of a single amount

Capital gains refer to:

profits from the sale of an investment asset

For a dependent to qualify as an exemption, her or she must:

receive more than one half of his or her support from the taxpayer

An exemption affects a person's tax situation by:

reducing the taxpayer's taxable income

The best way to maintain your credit rating is to:

repay your debts on time

Nate Rogers deposited $5,000 in a 3-year bank CD which pays six percent interest. What typeof financial service is Nate using?

savings service

Which one of the following items is a set amount of income on which no taxes are paid?

standard deduction

A traditional IRA, Keogh plan, and 401(k) plans are examples of:

tax-deferred retirement plans

A common deduction from a person's paycheck is for:

taxes

The annual price increase for consumer goods and services measured by the Bureau of Labor Statistics is referred called ______.

the consumer price index

The "head of household" filing status is for people who are:

unmarried and have dependent children

What should you do when you shop on-line using your credit card?

use a secure browser

If a family planned to spend $370 for food during March but only spent $348, this difference would be referred to as a:

variance

Which of the following is the point at which retirement contributions made on your behalf by the company belong to you even if you no longer work for the company?

vesting

Opportunity cost refers to:

what a person gives up by making a choice

Which of the following is a way to reduce ATM surcharges?

withdraw larger amounts rather than making multiple smaller withdrawals.