FIN 250 exam 1

Determine the rate of return on a savings account in which you deposited $200.00 and earned $5.00 in interest after one year.

2.5%

A person with erratic or seasonal income may need an emergency fund of _____ months or more.

6

Copies of tax returns and supporting data should be kept for _____ year(s).

7

Which statement is true regarding a tax credit?

A tax credit reduces the amount of taxes owed.

Résumés in the form of comic strips or "wanted" posters are most appropriate for careers in:

Advertising

Credit bureaus obtain data from which of the following?

Banks, credit card companies, finance companies, merchants.

Which type of organization does not provide home mortgages?

Check-cashing outlets

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

income tax

Money received in the form of dividends or interest is classified as ____________ income.

investment

You may identify a satisfying career using guidance tests that:

measure interests, abilities, and personal qualities.

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

mortgage

The 50/30/20 financial rule of thumb suggests that 20 percent of income be used for:

savings

The principal purpose of taxes is to:

to finance government activities

When imposters take your name, they are committing a crime. Group starts

true

You can often obtain medium-priced loans from commercial banks, federal savings banks, and credit unions.

true

references are usually not included in a résumé

true

What should you do when you shop online using your credit card?

use a secure browser

debt =

value of all liabilities

Flexible payments that change from month to month are referred to as:

variable expenses

Trade balance is defined as the difference between a country's exports and its imports.

true

Which one of the following is true for an interest-earning account?

It usually requires a minimum balance.

Which one of the following would likely lead to the most earnings over an individual's working career?

Professional or Doctoral Degree.

Cash and other tangible property (with a monetary value) that you own are referred to as:

assets

Which of the following types of financial institutions are insured by federal government agencies?

banks, credit unions, and savings and loan institutions.

Credit counselors are aware that most people who are in debt over their heads are:

basically honest people

The borrower's financial ability to meet credit obligations is called:

capacity

Which of the following is an example of the type of information that you would not usually include on a résumé?

career objective

"Loading" of prepaid debit cards may occur by:

cash or check, direct deposit, online transfer, smartphone check photo

A saver will usually receive higher earnings with which one of the following types of savings plans?

certificate of deposit

Demand deposits are another term for:

checking accounts

Which of the following is organized as a corporation and owned by stockholders?

commercial banks

The Consumer Credit Counseling Service (CCCS) is supported by contributions from:

consumer finance companies, banks, merchants, credit unions

The annual price increase for most goods and services measured by the Bureau of Labor Statistics is called ________.

consumer price index

Collection agencies are allowed to:

contact you as early as 8 am.

The first step of the financial planning process is to:

determine current financial situation

A question associated with the saving component of financial planning is:

do you have an adequate emergency fund>

Benjamin Smith has just moved into a new house and needs a lawn mower since he has always lived in apartments and now he has a lawn to mow. What type of goal would this be for Benjamin?

durable product goal

Which of the following would not be included in gross income?

exclusions

College students are not a prime target for credit card issuers

false

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

false

Determining your current financial situation is a part of which step in the financial planning process?

first

A ______ allows a taxpayer to put pre-tax dollars into an employer-sponsored program to cover medical expenses or child care costs.

flexible spending account

Characteristics of successful budgets include being:

flexible, well planned, clearly communicated, realistic

The pay-as-you-go system requires:

having federal income tax deducted from your paychecks.

A short-term capital gain is profit earned on an investment that is:

held for less than a year

Which of the following represent the use of credit?

home mortgage

real estate assests =

home value

Types of risks associated with financial decisions may include:

income risk, personal risk, inflation risk, liquidity risk.

Which of the following institutions is organized primarily to provide loans to purchase homes?

mortgage companies

The 50/30/20 financial rule of thumb suggests that 50 percent of income be used for:

necessities.

Attempts to increase financial resources are part of the ____________ component of financial planning.

obtaining

Thomas Hudson recently coordinated a fund-raising project for an organization that assists homeless youth. This would most likely be an example of experience in:

obtaining financial planning and budgeting skills.

The final stage of the career planning and advancement process is to:

plan and implement a program for career development

Acceptable references are those that can verify your abilities and competencies such as:

previous employers, business colleagues, supervisors, teachers

What is the rate that banks charge large corporations for loans called?

prime rate

Resources for financial planning can be found from:

print media, financial institutions, digital media, financial specialists.

A taxpayer whose spouse recently died and who has a dependent is most likely to use the ____________ filing status.

qualifying widow or widower

The value of the home you own would be included in which section of your balance sheet?

real estate assets

The financial planning process concludes with efforts to:

review and revise your financial plan

Inflation risk may include changes in buying power and:

rising prices, falling prices, decisions to buy now, decisions to buy later

The uncertainty associated with every decision is referred to as:

risk

Improvements in a person's financial position are the result of:

saving current income and investing

Which of the following would be organized as a personal and employment record in a home file?

social security number

When an individual makes a purchase without considering the financial consequences of that purchase, he/she ignores the ______________ aspect of financial planning.

spending

In addition to the Consumer Credit Counseling Service (CCCS), the following entities also provide counseling services:

state and federal housing authorities, universities, credit unions, military bases

In most societies, the forces of ______ set prices for securities, goods, and services.

supply and demand

If a family planned to spend $400 for food during April but only spent $350, this difference would be referred to as a:

surplus

This month, Kenneth Goldberg has cash inflows of $2,950 and cash outflows of $2,800, resulting in a:

surplus of $150

Which one of these terms is defined as the use of legitimate methods to reduce one's taxes?

tax avoidance

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

tax-deferred benefit

Which federal law, passed in 1969, requires creditors to state the cost of borrowing as a dollar amount?

the truth in lending law

Efficient work habits consist of using:

time management techniques, goal setting, note taking, lists

What is the term used to refer to the yield on a long-term (20-year) debt obligation issued by the U.S. government?

treasury bond rate

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

true

A restrictive endorsement on a check to be deposited consists of the words "for deposit only."

true

A restrictive endorsement on a check to be deposited consists of the words "for deposit only." Group starts

true

An estate tax is imposed on the value of an individual's property at the time of his or her death.

true

An office audit requires that a person visit an IRS office to clarify some aspect of his or her tax return.

true

Anyone who is overburdened by credit obligations can phone, write, or visit a Consumer Credit Counseling Service (CCCS) office.

true

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

true

Most of the information in your credit file may be reported for only seven years. However, if you have declared personal bankruptcy, then this fact may be reported for 10 years.

true

The Consumer Credit Counseling Service (CCCS) counseling is usually free.

true

The Consumer Financial Protection Bureau receives more consumer complaints about credit bureaus than about any other industry.

true

The Fair Credit Billing Act sets the procedures for promptly correcting billing mistakes/errors.

true

To protect yourself against credit card fraud, you should shred anything with your account number on it before throwing it away.

true

Earned income is money received from:

wages