Business Finance Final Exam

A cash flow statement gives you important feedback on your

income and spending patterns

Which of the following is not an asset category on the balance sheet

long term assets

Compared with commercial banks, credit unions generally offer

lower fees and loan rates

Renting is often a wise choice for someone who wants

mobility

All of the following are factors one should consider when deciding how much life insurance to have except

number of pets

The listing price is the amount that the

owner asks for the house

credit card holders are known as convenience users when they

pay off monthly balances

your net worth goes up when you

pay off previous debts

what might a buyer do to get a lower interest rate?

pay points

the trade off made by making one choice instead of another is commonly referred to as

perpetual cause

A lender may ask a buyer to deposit money in an escrow account for paying

property taxes

A disadvantage of renting

restrictive activities

which is not an advantage of credit

temptation to buy more than you can afford

Using credit may increase the amount of money you can spend now, but the cost of credit decreases the amount of money you will have in the future

true

When you borrow money or pay for items over time, interest is working against you

true

a deficit is when more money is spent than earned

true

a homeowners insurance policy protection includes losses caused by fire, water damage, storm, theft, and other perils

true

a legal document that describes the conditions of a rental agreement is a lease

true

a taxpayer can't claim a personal exemption on his/her own tax return when he/she can be claimed as a dependent on another taxpayer's return

true

an asset can also be a liability

true

credit cards are the most popular source of consumer credit

true

overdraft protection is an automatic loan made to an account in case the balance doesn't cover the checks

true

retained earnings are profits a company reinvests for expansion or research development

true

the appeal of investing in high risk stocks is the possibility of large returns

true

the higher the standard deduction amount, the lower the taxable income

true

the higher your deductible the lower your premiums are

true

the main purpose of the Fed is to regulate money supply in the US economy

true

values are the beliefs and principals you consider to be correct or desirable

true

An example of a open end credit is

credit cards

Which option is available for a taxpayer receiving a refund

direct deposit

An example of a variable expense is

electric bills

All employers offer group health coverage to all of their employees

false

Consumer spending can only affect the economy in a positive way

false

Employees send there payroll taxes directly to the federal govt

false

Gross pay is the amount of money the employee takes home

false

Life insurance is a binding legal contract between the insured and the insurer to protect the insured, their home, and belongings if they are damaged or destroyed

false

Private Mortgage Insurance is a special policy that protects the lender in case the buyer cant make payments

false

Tax benefits are an advantage of renting a house

false

You should include bonus's you might get at work when you estimate your income

false

saving money for the holidays is an example of a long term goal

false

when company earnings fall below what investors have expected it is common for stock prices to rise

false

A restrictive endorsement allows you to transfer a check to an organization or another person

false

A security deposit is money you pay the landlord for a security system

false

a car payment will be recorded in which section of the monthly cash flow statement

fixed expenses

Personal bankruptcy is reported on your credit report for

10 years

what year did banking for america begin?

1791

Stock market crashing

1929

social security tax rate

6.2

The goal of investing is to receive the original investment back with a return

True

Employers use which form to compute the amount of federal income tax to withhold

W4

series of equal regular deposits is called

an annuity

when writing a check, include all of the following except

an endorsement on the back

the cost of credit on a yearly basis, expressed as a percentage

annual percentage rate

This person, or legal entity, such as a charity, is designated to receive the death benefit

beneficiary

you will earn higher interest rate when you

buy a certificate of deposit

taking responsibility for someones loan

co-signing

This covers damages to your car from a collision

collision coverage

earning interest on previously earned interest

compounding

A borrower is a credit card holder who does not pay off his/her balances in full each month

true

A mortgage is an example of a closed end credit

true

A secured loan is one guaranteed to be repaid through safe collateral

true

A taxpayer and his/her spouse can each claim a personal exemption

true

Equity is the value of a home less the amount still owed on the loan

true

Group health insurance is a valuable employee benefit because the employer pays part of your premium for your insurance

true

Having a budget and using a cash flow statement can help you anticipate shortages and surpluses

true

Some people lost faith in the banking system before the Federal Bank Reserve was in place because the bank did not have enough to pay depositors

true

The Federal reserve is divided into 12 districts representing regions within the country. Each has their own dates.

true