personal financial literacy module three test

When choosing to apply for a new credit card, things like airline points and cashback rewards should be considered of high priority.

False

You are not required by law to pay taxes.

False

What Federal department is responsible for enforcing laws related to consumer credit?

Federal Trade Commission

_________ wages are the amount you are paid for your work before any taxes or benefits are taken out of your paycheck. You will not receive this amount in your bank account.

Gross

What company is the leading source for most lenders researching credit information on a person applying for a loan or some type of credit?

The Fair Isaac Corporation

How do a savings account and money market account differ?

You can write checks from a money market account, but cannot from a savings account

What is a credit score?

a "snapshot" of a person's creditworthiness at one point in time

Social Security tax

a government taxed used to help fund retirement benefits and disability benefits

Certificate of Deposit

a product offered by a financial institutions

inheritance tax

a state tax collected on the property left by a person to his or her heir(s) in a will

To determine net pay you subtract from x from x

deductions gross pay

Getting into debt can ________ God an opportunity to provide for our needs.

deny

In Ron Blue's video about credit cards, he states that when you use a credit card as opposed to cash, you will spend 34% less than if you just spend cash.

false

In debt situations, compounding works in your favor.

false

In the Ron Blue video within the lesson, Mr. Blue makes it clear that after running the numbers, leasing is always a better financial decision than buying a car.

false

It is part of God's plan for us to live an individual life, away from others.

false

Estate Tax

federal tax on inheritance

When you do not pay off a credit card in full each month, you may potentially pay hundreds or thousands of dollars in ______________ fees. Correct! financing

financing

IRA

for people who want to put their money into a tax deferred account or bank

457

for people who work at state or local governments

Paying taxes is a way to live a ____________ life for the provision that God has given us.

grateful

HSA

health savings account

A home equity line of credit is a form of revolving credit in which our _________ serves as collateral.

home

Loans based on borrowed money from an existing account such as a retirement or investment plan that has to be paid back before using the account for retirement.

insurance/ retirment

If you pay off your credit card balance during the allowed grace period each month, you should not be charged any ____________.

interest

When we grow in relationship with ______________, we grow in relationship with God.

others

regular earnings

pay received for a persons regularly scheduled hours

overtime pay

pay received for hours worked in addition to regular hours

Short-term loans with high interest rates and fees that tend to reflect poorly on your credit rating.

payday

Dividends from Stocks and Bonds

payments made by a company to the owners of a company stock

The costs for public education are mainly for what?

payroll expenses related to public school employees

A community is defined as a group of _____________ living in the same place or having characteristics in common.

people

TSP

people employed by the federal government

Other than your monthly rental payment, what are some of the things you may have to pay for while living in a rental property? Choose all that apply.

pets utilities extra storage parking spaces laundry facilities

What are some services within a community that are paid with tax revenue? Select all correct answers.

police department fire and rescue departments library public schools sanitation/waste removal

What areas fall under Law Enforcement and are paid for in part or whole by tax revenue? Choose all that apply.

police/sheriff's department courts and judges correctional facilities animal control

The Equal Credit Opportunity Act prohibits credit discrimination based on _______________. Choose all that apply.

race or color your relgion age gender

For credit cards, what is the "grace period?"

the time allotted for one to pay off credit card balances without fees or interest

savings account

through a bank, learns little intrest

YTD (year-to-date)

total for earnings and deductions that year

What three things should you avoid doing so your credit score won't be affected?

transferring a credit balance from one credit card to another not using credit cards closing credit accounts

Public libraries are funded through tax dollars.

true

Social Security taxes, also known as the "Federal Insurance Contributions Act" tax, provide benefits for retired workers and their dependents and for disabled workers and their dependents.

true

The "About Page" of an organization's website can help you learn valuable information about that organization.

true

It is illegal for debt collectors to _______________________.

use abusive or deceptive practices to collect debt you owe

College 429 Plan

usually for college

In Ron Blue's video that discusses if it is right or wrong to have a credit card, he says that it is not wrong to have credit cards, and it is not wrong to use credit cards, but it is not always the ____________________.

wiset thing to do ecnomically

What is the portion of an employee's wages that is not included in their paycheck because it goes directly to federal, state, and local taxes?

withholding

Leasing a car could be a good option for you if _______________________. Choose all applicable answers.

your yearly mileage is less than 10,000 miles you want to drive a better car for less money you need a lower payment you want to drive a car that is under the warranty of the manufacturer you prefer to trade cars often

It is mandated that all Fire and Rescue workers are paid.

False

W-2 Form

A form that outlines an individual's earnings, and tax deductions incurred.

What is a W-4 Form?

A form used by your employer to withhold the correct income tax from your salary

401(k)

A defined contribution plan that automatically takes out money from an employee's paycheck before income taxes and invests it in mutual funds for purposes of retirement savings

403(b)

A retirement account similar to a 401(k) plan, but offered by non-profit organizations, like universities or charitable organizations.

What is a lease?

An agreement between an owner and a tenant that outlines the obligations of both parties regarding renting an apartment or house

Tax Credit

An amount subtracted directly from the tax owed

When you have a credit card, it comes with certain stated policies and privileges. Select all that pertain to being a credit card customer:

Annual fees are assessed yearly by some credit card companies, especially for premier accounts. Most cards have a grace period of 25-30 days where no interest is charged on purchases. Some credit cards come with rewards points or cash-back programs. There is a minimum payment due based on your account balance and percentages. APR interest rates tend to be between 8-24%. Late fees can/will be assessed if your payment is past due.

Choose all procedures and steps related to buying an automobile.

Check out the reputation and reliability of the dealer and car manufacturer. Take a test drive. Choose a vehicle that best suits your needs and budget. Research options for financing and don't always depend on the dealer for the best offer. Choose insurance coverage that is correct for your car. Make sure you read and understand any documents before you sign them.

What date indicates the end of the tax year?

December 31

What are some items that the Federal Government uses citizen tax money to pay for? Choose all that apply.

Defense Medicare Roads Social Security

From the list below, choose the three leading credit reporting bureaus that lenders access to check credit scores.

Equifax TransUnion Experian

The federal agency responsible for disaster relief is known as:

FEMA (Federal Emergency Management Agency)

Tenants are protected against discrimination by the ___________________.

Fair Housing Act

Credit card interest rates never go above 10%.

False

What is the credit utilization ratio?

It is a ratio of the amount of debt you owe to the amount of debt you have been approved for.

When should you receive your W-2 Form from your employer?

January 31st

Paying taxes is a biblical principle. In what book of the Bible does Jesus tell us to render to Caesar what is Caesar's?

Matthew

What are some types of taxes that you may pay in your lifetime? Choose all that are correct.

Medicare taxes Property taxes Income taxes Social Security taxes Sales taxes

______ pay is the amount of money you actually get to take home, otherwise known as "take-home pay."

Net

Do creditors always report activity on your account and all new accounts to the three credit reporting bureaus?

No, so some of your credit history may be missing from one or all three.

What are some steps a renter should take in order to make sure the best choices are made when considering a place to live?

Purchase renter's insurance to cover any personal property against damage, loss, and theft. Make sure all forms are complete and references available if asked. Keep communication open between you and the landlord or managing agent. Get everything from monthly payments to renter/landlord responsibilities in writing. Know your privacy rights and any curfews in effect.

If you are buying a used car, what are some actions you might want to take before purchasing a vehicle?

Research any records pertaining to recalls or accidents related to the specific vehicle. Look for pricing for similar models on the internet or other dealerships. Ask about any warranties or dealer-sponsored guarantees. Have a mechanic inspect the vehicle for any possible mechanical problems.

All of the following people should receive W-2 Forms EXCEPT:

Serena, who is a freelance wedding photographer

What tax deductions are considered statutory (those mandated by law)?

State Medicare Social Security Federal

Which of the following deductions that the employee has voluntarily signed up to have deducted? Choose all that apply.

Stock Plan Health Insurance Union or organizational dues Life Insurance 401K and other retirement/investment plans

income tax

Tax paid to the state, federal, and local governments based on income earned over the past year.

When choosing the right organization to be a part of, what information is important to check beforehand?

The "About" page on their website Their contact information and Tax ID Number Internet research and reviews Their financial information Accomplishments and track record The organization's transparency

What are the four guidelines to consider when determining if debt is a wise decision

The economic reward is greater than the economic cost You have peace of mind via "gut check" questions There is unity with important relationships regarding the decision There is a guaranteed way to repay

An Inheritance Tax is a State Tax.

True

I Thessalonians 5:18 says to "give thanks in ______ circumstances."

all

Tax-deferred accounts _________________________.

are taxed later when a person has retired and is in a lower tax bracket

Proverbs 22:7 says the ?is a slave to the ?

borrower lender

IRAs

can be traditional or roth

A department store-sponsored card offers special incentives to shop with the store, but it also carries higher interest rates. These cards _______________________.

cannot be used anywhere you want since they are sponsored by a specific store

Of all the types of credit offered to consumers, which ones are the worst because of their fees, interest rates, and effect on your credit rating? Choose two.

car title loans payday loans

A ____________ is defined as a group of people living in the same place or having a particular characteristic in common.

community

Loans that are either personal loans or second mortgages issued to borrowers to help pay off several other credit accounts by combining them into one loan.

consolidation loans

What kind of credit is the most favorable to have on your credit report?

credit backed by assets or equity such as a house mortgage or car loan

There are two basic kinds of credit cards. The typical credit card is based on a/an [ Select ] ["financial statement", "equity line of credit", "credit limit"] that is set by [ Select ] ["the sponsoring financial institution", "a committee of your friends", "your neighborhood watch group"] , and it is linked to your [ Select ] ["social standing", "favorite number", "credit rating"] or personal request. The second kind of credit card is a secured card and it is more like a [ Select ] ["debit card", "passbook", "checkbook"] because it is directly tied to a checking or savings account. All limits for this card are based on your [ Select ] ["account balance", "credit rating", "personal request"] instead of an approved limit.

credit limit the sponsoring financial institution credit rating secured card debit card account balance

A tax deduction is a dollar amount that the IRS allows you to subtract from your adjusted gross income, or AGI, making your taxable income

lower

Financial issues are never really a x problem, but are symptomatic of x issues

money heart

Loans offered by financial institutions at lower interest rates that are issued for the purchase of a house or real estate property.

mortgages

401(k), 403(b) and 457 plans

most common type

Most people participate in tax-deferred savings and investments accounts for ______________________.

retirement and travel

Thrift Savings Plans

retirment savings

Some options add to the value of a car like air conditioning and an automatic transmission. Choose from below items that add costs, but are not really worth the extra dollars.

rustproofing (most cars have a 5 to 10-year warranty against rust) auto club memberships upholstery finishes extended warranties by third-party sellers

Money Market Account

savings account but you can write checks from it

Tenant rights, laws, and any protection afforded both tenants and renters are determined at what government level?

state

Loans offered to college students and their parents. Some are subsidized so no interest accrues until the student graduates. These loans can be federally funded or from private financial institutions.

student loans

What two sections make up the "Owe" portion of the pie diagram?

taxes debt