Personal Finance Midterm Rutgers

local nonprofit org affiliated w the National Foundation for Consumer Credit

A Consumer Credit Counseling Service is a: a. local, nonprofit org affiliated w the National Foundation for Consumer Credit b. profit organization operated by the Better Business Bureau c. governmental institution d. lending institution that helps families with severe financial difficulties

mortgage interest

A deductible as an itemized deduction: a. mortgage interest b. credit card c. an IRA contributions d. commissions and bonuses

arbitration

A legally binding decision by a third part is: a. arbitration b. meditation c. a legal society d. a pre-paid legal service

income & payments

A personal cash flow statement presents: a. amounts earned from savings b. income & payments c. assets & liabilities d. amounts owed to others

certified check

A personal check with guaranteed payment is a: a. certified check b. bank draft c. cashier's check d. money order

restrictive

A special endorsement that is most useful when depositing checks by mail: a. special b. blank c. restrictive d. multiple

40%

Approx. what percentage of US workers is estimated to be freelancers/contractors by 2020? a. 20% b. 30% c. 40% d. 50%

300 to 850

FICO scores generally range from: a. 100 to 990 b. 250 to 800 c. 300 to 850 d. 450 to 900

subtract qualified deductible expenses from business income on form 2016

How do freelancers deduct business-related expenses on their federal income tax return?

2

How many times per year do freelancers have to make estimated tax payments to the IRS? a. 1 b. 2 c. 3 d. 4

20%

The credit utilization ratio for someone with $1,000 charged on three credit cards that have a total available credit limit of $5,000 is: a. 10% b. 20% c. 35% d. 50%

investment company

The fewest financial services would probably be offered by a(n): a. credit union b. savings and loan association c. commercial bank d. investment company

new-car dealer

The highest prices for used cars are usually at a: a. new-car dealer b. used-car dealer c. private-party sale d. public auto auction

yield

The rate of return on a savings account may also be referred to as: a. yield b. compounding c. liquidity d. equity

certificate of deposit

The savings plan that is likely to have a set rate of return is a: a. money market account b. certificate of deposit c. debit card account d. money market fund

full

This warranty covers most repairs of a product: a. limited b. implied c. full d. express

liabilities

What represents amounts owed to others? a. current assets b. expenses c. mutual funds d. liabilities

2106

What tax form should self-employed persons receive from their clients for jobs paying more than $600? a. 2106 b. 8962 c. 1098 d. 1099

price of the vehicle

When leasing a motor vehicle, the capitalized cost refers to the: a. security deposit b. residual value c. interest rate d. price of the vehicle

types of credit used

Which factor counts the most in the calculation of a person's credit score? a. types of credit used b. length of credit history c. credit utilization ratio d. previous payment history

Fair Isaac

Which of the following companies is the leading provider of credit scores? a. TransUnion b. fair Isaac c. Equifax d. Experian

Sole Proprietorship

Which of the following is the easiest business structure for entrepreneurs to set up? a. Limited Liability Company (LLC) b. partnership c. sole proprietorship d. S corporation

climate

Which one of the following is not one of the five Cs of credit? a. conditions b. climate c. character d. capacity

legal aid societies

_____________ are publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney a. small claims b. class actions suits c. legal aid societies d. legal clinics

budget

a plan for spending and saving money: a. budget b. value c. dream d. want

food

an example of a flexible expense in a budget is: a. car loan payment b. food c. insurance premium d. rent

checking account

an example of a liquid asset is: a. a home b. an automobile c. a checking account d. retirement account

installment credit

an example of closed-end credit is: a. incidental credit b. revolving check credit c. credit cards d. installment sales credit

revolving check credit

an example of open-end credit is: a. installment sales credit b. revolving check credit c. mortgage loans d. automobile loans

interest from municipal bonds

an example of tax-exempt income is: a. gambling winnings b. pension funds c. rental income d. interest from municipal bonds

a reduction from adjusted gross income

an exemption refers to: a. taxable income b. deductible expenses c. a reduction from adjusted gross income d. amounts not subject to an IRS audit

creditors

companies that loan money to borrowers and charge interest to make a profit are called: a. creditors b. credit bureaus c. credit scoring organizations d. cosigners

fixed expenses

definite financial obligations are referred to as: a. variable expenses b. fixed expenses c. equity d. investment assets

flexible

expenses that change each month are called: a. fixed b. rotating c. flexible d. occasional

3 months

financial experts recommend having enough money saved for emergencies to cover at least: a. one week's living expenses b. one month's expenses c. 3 month's expenses d. 9 month's expenses

you don't have money to use all year long

getting a large tax refund is generally not considered a good idea because: a. you can't file for the earned income tax credit if you get a refund b. your employer will withhold more money for taxes next year c. the IRS only pays 2% interest on money that is overwithheld d. you don't have money to use all year long

savings

in order to reach your financial goals, you must include __________ in your budget: a. food b. rent c. savings d. values

subtracting liabilities from assets

net worth is calculated by: a. adding income & expenses b. subtracting expenses from income c. adding assets & liabilities d. subtracting liabilities from assets

9 years

paul invested $1000 in a mutual fund that earns an 8% average annual return. Approx. how long will it take for his money to double? a. 7 years b. 8 years c. 9 years d. 10 years

property or cash

secured credit is backed by: a. your ability to pay b. your payment history c. your credit score d. property or cash

need

something you must have in order to live: a. value b. want c. need d. goal

pay yourself first

the act of putting money into savings on a regular basis before it can be spent is called: a. financial planning b. pay yourself first c. cash flow d. income maximization

disposable income

the amount of income left in someone's paycheck after taxes and other deductions is: a. discretionatory income b. adjusted gross income c. taxable income d. disposable income

W-2 form

the form provided annually by employers to report workers' earnings and tax withholdings is called a: a. W-4 form b. 1099 form c. W-2 form d. 1040 form

W-4 form

the form used to tell your employer how much tax to withhold is called a: a. W-4 form b. 1099 form c. W-2 form d. 1040 form

credit unions are owned by their members

the main difference between a bank and credit union is that a. only banks offer savings accounts b. only banks provide insurance for depositors' assets c. credit unions are owned by their members d. credit unions only take deposits but do not make loans

simple interest formula

the most common method of calculating the cost of credit is the: a. simple interest on the declining balance b. add-on interest c. simple interest formula d. annual percentage rate method

compound interest

the process of earning "interest on interest" on money placed in a savings account is called: a. compound interest b. simple interest c. tax-free interest d. account reconciliation

annual percentage rate

to determine the total cost of credit when comparing different credit cards, review the: a. annual percentage rate b. late fee c. annual fee d. balance transfer fee

15.3%

what percentage of their net income must freelancers pay for FICA tax? a. 7.65% b. 15.3% c. 22.95% d. 39.6%

tax-deferred

what type of investment produces income that will be subject to income tax sometime in the future? a. non-taxable b. tax-deferred c. taxable d. tax-exempt

field audit

when an IRS agent visits your home or office to verify tax records, this is referred to as: a. office audit b. field audit c. correspondence audit d. research audit

compare their fees & services

when selecting a bank, check out at least 3 diff companies and: a. compare their fees and services b. select the closest to where you work c. pick the one paying the highest interest rates d. choose the one w the most ATM machines

shop around and compare

when selecting a credit card, it is best to: a. get one with the best cash-back rewards b. use the one offered by your local bank c. shop around and compare costs & features d. get the one with the lowest annual fee

the full amount due

when using credit, it is always best to pay: a. the minimum payment b. the full amount due c. whatever amount you can d. the average daily balance

installment credit

which form of credit involves making regular monthly payments for large purchases such as a car? a. service credit b. revolving credit c. installment credit d. cosigned credit

charges a fee

which is not an advantage of having a bank account? a. provides a safe place to put depositors' money b. charges a fee, called interest, to put money in an account c. provides gov insurance on depositors' money in case a bank fails d. depositors can have their paycheck deposited directly into account

credit history

which of the following factors can lenders consider as a valid reason for denying someone credit? a. race and age b. marital status c. disability d. credit history

food eaten out

which of the following is not a basic financial need? a. food b. transportation to and from work c. food eaten out at a restaurant d. a place to live

real estate

which of the following is the least liquid? a. stock b. mutual fund c. money market deposit account d. real estate

money market deposit account

which of the following is the lowest risk investment? a. real estate b. money market deposit account c. stock mutual fund d. corporate bond

religious affiliation

which of the following pieces of info is not found on a person's credit report? a. current address and recent past addresses b. religious affiliation c. info obtained from courthouse records d. social security number