Personal Finance Midterm Rutgers
local nonprofit org affiliated w the National Foundation for Consumer Credit
A Consumer Credit Counseling Service is a: a. local, nonprofit org affiliated w the National Foundation for Consumer Credit b. profit organization operated by the Better Business Bureau c. governmental institution d. lending institution that helps families with severe financial difficulties
mortgage interest
A deductible as an itemized deduction: a. mortgage interest b. credit card c. an IRA contributions d. commissions and bonuses
arbitration
A legally binding decision by a third part is: a. arbitration b. meditation c. a legal society d. a pre-paid legal service
income & payments
A personal cash flow statement presents: a. amounts earned from savings b. income & payments c. assets & liabilities d. amounts owed to others
certified check
A personal check with guaranteed payment is a: a. certified check b. bank draft c. cashier's check d. money order
restrictive
A special endorsement that is most useful when depositing checks by mail: a. special b. blank c. restrictive d. multiple
40%
Approx. what percentage of US workers is estimated to be freelancers/contractors by 2020? a. 20% b. 30% c. 40% d. 50%
300 to 850
FICO scores generally range from: a. 100 to 990 b. 250 to 800 c. 300 to 850 d. 450 to 900
subtract qualified deductible expenses from business income on form 2016
How do freelancers deduct business-related expenses on their federal income tax return?
2
How many times per year do freelancers have to make estimated tax payments to the IRS? a. 1 b. 2 c. 3 d. 4
20%
The credit utilization ratio for someone with $1,000 charged on three credit cards that have a total available credit limit of $5,000 is: a. 10% b. 20% c. 35% d. 50%
investment company
The fewest financial services would probably be offered by a(n): a. credit union b. savings and loan association c. commercial bank d. investment company
new-car dealer
The highest prices for used cars are usually at a: a. new-car dealer b. used-car dealer c. private-party sale d. public auto auction
yield
The rate of return on a savings account may also be referred to as: a. yield b. compounding c. liquidity d. equity
certificate of deposit
The savings plan that is likely to have a set rate of return is a: a. money market account b. certificate of deposit c. debit card account d. money market fund
full
This warranty covers most repairs of a product: a. limited b. implied c. full d. express
liabilities
What represents amounts owed to others? a. current assets b. expenses c. mutual funds d. liabilities
2106
What tax form should self-employed persons receive from their clients for jobs paying more than $600? a. 2106 b. 8962 c. 1098 d. 1099
price of the vehicle
When leasing a motor vehicle, the capitalized cost refers to the: a. security deposit b. residual value c. interest rate d. price of the vehicle
types of credit used
Which factor counts the most in the calculation of a person's credit score? a. types of credit used b. length of credit history c. credit utilization ratio d. previous payment history
Fair Isaac
Which of the following companies is the leading provider of credit scores? a. TransUnion b. fair Isaac c. Equifax d. Experian
Sole Proprietorship
Which of the following is the easiest business structure for entrepreneurs to set up? a. Limited Liability Company (LLC) b. partnership c. sole proprietorship d. S corporation
climate
Which one of the following is not one of the five Cs of credit? a. conditions b. climate c. character d. capacity
legal aid societies
_____________ are publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney a. small claims b. class actions suits c. legal aid societies d. legal clinics
budget
a plan for spending and saving money: a. budget b. value c. dream d. want
food
an example of a flexible expense in a budget is: a. car loan payment b. food c. insurance premium d. rent
checking account
an example of a liquid asset is: a. a home b. an automobile c. a checking account d. retirement account
installment credit
an example of closed-end credit is: a. incidental credit b. revolving check credit c. credit cards d. installment sales credit
revolving check credit
an example of open-end credit is: a. installment sales credit b. revolving check credit c. mortgage loans d. automobile loans
interest from municipal bonds
an example of tax-exempt income is: a. gambling winnings b. pension funds c. rental income d. interest from municipal bonds
a reduction from adjusted gross income
an exemption refers to: a. taxable income b. deductible expenses c. a reduction from adjusted gross income d. amounts not subject to an IRS audit
creditors
companies that loan money to borrowers and charge interest to make a profit are called: a. creditors b. credit bureaus c. credit scoring organizations d. cosigners
fixed expenses
definite financial obligations are referred to as: a. variable expenses b. fixed expenses c. equity d. investment assets
flexible
expenses that change each month are called: a. fixed b. rotating c. flexible d. occasional
3 months
financial experts recommend having enough money saved for emergencies to cover at least: a. one week's living expenses b. one month's expenses c. 3 month's expenses d. 9 month's expenses
you don't have money to use all year long
getting a large tax refund is generally not considered a good idea because: a. you can't file for the earned income tax credit if you get a refund b. your employer will withhold more money for taxes next year c. the IRS only pays 2% interest on money that is overwithheld d. you don't have money to use all year long
savings
in order to reach your financial goals, you must include __________ in your budget: a. food b. rent c. savings d. values
subtracting liabilities from assets
net worth is calculated by: a. adding income & expenses b. subtracting expenses from income c. adding assets & liabilities d. subtracting liabilities from assets
9 years
paul invested $1000 in a mutual fund that earns an 8% average annual return. Approx. how long will it take for his money to double? a. 7 years b. 8 years c. 9 years d. 10 years
property or cash
secured credit is backed by: a. your ability to pay b. your payment history c. your credit score d. property or cash
need
something you must have in order to live: a. value b. want c. need d. goal
pay yourself first
the act of putting money into savings on a regular basis before it can be spent is called: a. financial planning b. pay yourself first c. cash flow d. income maximization
disposable income
the amount of income left in someone's paycheck after taxes and other deductions is: a. discretionatory income b. adjusted gross income c. taxable income d. disposable income
W-2 form
the form provided annually by employers to report workers' earnings and tax withholdings is called a: a. W-4 form b. 1099 form c. W-2 form d. 1040 form
W-4 form
the form used to tell your employer how much tax to withhold is called a: a. W-4 form b. 1099 form c. W-2 form d. 1040 form
credit unions are owned by their members
the main difference between a bank and credit union is that a. only banks offer savings accounts b. only banks provide insurance for depositors' assets c. credit unions are owned by their members d. credit unions only take deposits but do not make loans
simple interest formula
the most common method of calculating the cost of credit is the: a. simple interest on the declining balance b. add-on interest c. simple interest formula d. annual percentage rate method
compound interest
the process of earning "interest on interest" on money placed in a savings account is called: a. compound interest b. simple interest c. tax-free interest d. account reconciliation
annual percentage rate
to determine the total cost of credit when comparing different credit cards, review the: a. annual percentage rate b. late fee c. annual fee d. balance transfer fee
15.3%
what percentage of their net income must freelancers pay for FICA tax? a. 7.65% b. 15.3% c. 22.95% d. 39.6%
tax-deferred
what type of investment produces income that will be subject to income tax sometime in the future? a. non-taxable b. tax-deferred c. taxable d. tax-exempt
field audit
when an IRS agent visits your home or office to verify tax records, this is referred to as: a. office audit b. field audit c. correspondence audit d. research audit
compare their fees & services
when selecting a bank, check out at least 3 diff companies and: a. compare their fees and services b. select the closest to where you work c. pick the one paying the highest interest rates d. choose the one w the most ATM machines
shop around and compare
when selecting a credit card, it is best to: a. get one with the best cash-back rewards b. use the one offered by your local bank c. shop around and compare costs & features d. get the one with the lowest annual fee
the full amount due
when using credit, it is always best to pay: a. the minimum payment b. the full amount due c. whatever amount you can d. the average daily balance
installment credit
which form of credit involves making regular monthly payments for large purchases such as a car? a. service credit b. revolving credit c. installment credit d. cosigned credit
charges a fee
which is not an advantage of having a bank account? a. provides a safe place to put depositors' money b. charges a fee, called interest, to put money in an account c. provides gov insurance on depositors' money in case a bank fails d. depositors can have their paycheck deposited directly into account
credit history
which of the following factors can lenders consider as a valid reason for denying someone credit? a. race and age b. marital status c. disability d. credit history
food eaten out
which of the following is not a basic financial need? a. food b. transportation to and from work c. food eaten out at a restaurant d. a place to live
real estate
which of the following is the least liquid? a. stock b. mutual fund c. money market deposit account d. real estate
money market deposit account
which of the following is the lowest risk investment? a. real estate b. money market deposit account c. stock mutual fund d. corporate bond
religious affiliation
which of the following pieces of info is not found on a person's credit report? a. current address and recent past addresses b. religious affiliation c. info obtained from courthouse records d. social security number