Study Guide Fin
George Berk had earnings from his salary of $32,000, interest on savings of $200, a contribution to a traditional individual retirement account of $1,200, and dividends from mutual funds of $125. George's adjusted gross income (AGI) would be
A. $31,125. 32,000+ 200 + 125 - 1,200 = 31, 125
What's the first thing you should do with any extra income?
A. Build up your emergency fund
Which of the following describe a tip for paying yourself first?
A. Put unexpected income into savings.
A(n) __________ is a specific plan for spending.
A. budget
This month, Kenneth Goldberg has cash inflows of $2,950 and cash outflows of $2,800, resulting in a:
A.surplus of $150.
A family with $50,000 in assets and $22,000 of liabilities would have a net worth of:
B. $28,000.
What is the recommended minimum number of months of living expenses to set aside in an emergency fund
B. At least three
A personal cash flow statement presents
B. Income and payments
Your take-home pay is:
B. The income you have left after taxes and deductions
The principal purpose of taxes is to:
B. finance government activities.
The most important difference between a need and a want is:
C. A need is something you must have now and a want is optional
In budgeting, what's the biggest difference between fixed and flexible expenses?
C. You can reduce flexible expenses more easily
What type of tax is imposed on the value of an individual's property at the time of his or her death?
D. Estate
_________ represent amounts owed to others.
D. Liabilities
What is gross pay?
D. The full amount of income you are paid
What time period covers savings goals for your longterm future?
More than three years
The final step in the financial planning process is to
review and revise your actions.
Opportunity cost refers to
trade-offs when a decision is made
The annual price increase for most goods and services measured by the Bureau of Labor Statistics is called
B. the consumer price index
This month, David Lee has cash inflows of $2,800 and cash outflows of $2,950, resulting in a:
C. deficit of $150