PF exam #1
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