CSM204 - Exam 1 (Knowledge Checks)

A tax credit of $100 for a person in a 24 percent tax bracket would reduce a person's taxes owed by:

$100

A taxable investment produced interest earnings of $1,200. A person in a 22 percent tax bracket would have after-tax earnings of:

$936

Characteristics of successful budgets include being:

All of these

Which is a CD that offers a higher rate at set intervals, such as every six months you are invested?

Bump-up

Furniture, jewelry, and an automobile are examples of liquid assets.

FALSE

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

Commercial banks

When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance.

FALSE

Payments that do not vary from month to month are ________ expenses.

Fixed

If a person deposited $75 a month for 5 years earning 7 percent, this would involve what type of computation?

Future value of a series of deposits

Which of the following would cause consumer prices to drop?

Increased supply by business without increased consumer demand

Which one of the following will help to avoid identity theft?

Protect personal information (such as social security number)

Using a debit card to make purchases means you are spending your own funds.

TRUE

Which one of the following items is a set amount of income on which no taxes are paid?

Standard deduction

Inflation reduces the buying power of the dollar.

TRUE

A cash flow statement reports a person's or a family's:

cash receipts and payments.

Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to:

liquidity risk.

The main responsibility of The Fed is to:

maintain an adequate supply of money.

A person who owes total federal income taxes of $3,450 but had total withholdings of $3,125 would:

make a payment of $325.

A person's net worth would increase as a result of:

reducing the amounts you owe to others.

The "head of household" filing status is for someone who is:

unmarried/single who maintains a household for a child or dependent relative