PF exam #1

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

When cancelling a credit card......

Inform the issuer in writting

What would you not include in your gross income?

Life insurance death benefits

The quality of your credit rating is maintained by

Meeting credit obligations as contracts require

In which of the following situations would you have to pay additional money when returning a leased car at the end of a closed-end term?

Milage limits were exceeded

William uses his bank credit card frequently; however, he always pays off the total balance on the card each month. What should William look for in a credit card given the way he uses a credit card?

No annual fee and long grace period

The loss of value in a car overtime

depreciation

Which of the following are important safeguards when banking?

firewall, FDIC insurance, all of the above

Which of the following state and local taxes are deductible on federal income taxes for those that itemize deductions

income taxes and property taxes

What is least important to someone with large balances on a card?

low interst fees and no annual fee

Variable auto ownership costs are most dependent on

mileage driven

Large transaction increases what.....

net worth stays the same

Who would most likely have to pay estimated taxes

self-employed plumber

The required monthly payment on an open account will be smaller of a minimum dollar amount or a-specified balance

False

Interest will almost always begin to accrue immediately when you use a bank credit card to

Get cash advances

What are the lowest interest rates on

Home equity loans

As a percent of take-home pay, monthly consumer credit payments should not exceed

20%

Itemized deductions are listed on schedule

A

When doing a DDA reconciliation, interest earned on your account should be

Added to your checkbook ledger

If you write a check for an amount greater than your account balance, the result will be

An overdraft

All of the following are useful ways to build a strong credit rating except

Apply for a long term loan and occasionally make late payments

Whenever you write a check or make a deposit, an entry should be made on your

Checkbook ledger

Which of the following loan sources are most expensive?

Consumer finance companies

The annual percentage yield is the same as

Effective rate

Generally speaking, the interest rates on a credit card are lower than any other form of credit

False

Installment loans are typically repaid in one payment

False

Where will a used car cost less from?

Private individuals

Where would you have to pay additional expenses in an open-ended lease?

Residual value is less than expected and mileage limits were exceeded

Advantages on online billing system

Round the clock help

Which source of consumer loan specializes in home mortgage lending?

Savings and loan associations

What income is subject to federal taxes

Taxable

The capital cost reduction on a vehicle lease is

The residual value at the end of the lease.

The balance sheet equation is

Total assets - total liability = net worth

Collateral is an item of value used to secure the principal portion of a loan

True

Credit cards look like debit cards but work like checks

True

One's average tax rate is typically lower than one's marginal tax rate.

True

Revolving credit lines are often accessed by writing checks

True

The cash value of a whole life insurance policy can be used as a source of loan collateral.

True

The student loans with the best loan terms are the Stafford and the Perkins loans.

True

You have no employer provided pension plan; your IRA contributions are treated as

an adjustments to gross income

One can arrange auto loans through

auto dealers, banks, credit unions, consumer finance companies

Rebate card work best for those who use the rebates and

charge large amounts on card and pay the total card off monthly

tax credits adjust your

tax liability

When purchasing a new vehicle, what should be settled first?

the cost of the vehicle

College student whose parents contribute to his support. They can continue as a tax dependent as long as.....

they contribute to more than half of his support


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