BUS 146 Test 1

Money is

A medium of exchange

Employee benefits may include

all of the above

The standard deduction is a blanket deduction that depends on the taxpayers

all of the above

your income is directly related to your

all of these

The balance sheet describes a family's wealth

at a certain point in time

In order to minimize the difficulty associated with meeting monthly loan payments, the debt service ratio should be

below 35%

Your _______ is an example of a liquid asset.

checking account

The three key groups in the economic environment are

government, consumers, and businesses

Which of the following is NOT one of the three basic categories for individual income?

gross income

The federal governments gets the majority of its revenue from the ______ tax

income

The income statement includes

income, expenditures, surplus, or deficit

The three parts of your balance sheet are

income, liabilities, net worth

Using balance sheet information, the ____ ratio indicates your ability to meet current debt payments

liquidity

Tax planning is most commonly done to

minimize taxes

The main purpose of a budget is to

monitor and control financial outcomes

_______ would not be a long term financial goal.

paying your phone bill

The Federal Income Tax is

progressive

The amount of goods and services each dollar buys at any given point in time is

purchasing power

Family financial goals should be

realistically attainable

The last step in the financial planning process is to

redefine goals and revise plans and strategies as personal circumstances change

Inflation refers to

rising prices

The four stages of an economic cycle would not include

stagnation

If you do not wish to itemize deductions, you can use the

standard deduction

A progressive tax system is one in which higher-income people pay ________ than lower-income people.

tax at a higher rate

Kim's net worth is $85,000 and her total assets are $100,000. What is Kim's solvency ratio?

85%

Michael and Sandy purchased a home for $100,000 five years ago. It appreciated 6% annually, what is it worth today?

$133,800

Elena purchased a stamp collection for $5,000 thirty years ago. If it appreciated 8% annually, what is it worth today?

$50,315

You made an error when you filed your tax return last year. You can correct this error by filing Form

1040X

Mindy and Lou had liquid assets of $10,000 and current debts of $30,000. What is their liquidity ratio?

33%

Jacque's total monthly loan payments are $1,020 while her gross income is $3,000 per month. What is her debt service ratio?

34%