Personal Finance Pt. 1 (Exam 3)

A family with $45,000 in assets and $22,000 of liabilities would have a net worth of:

$23,000.

The Roth IRA differs from the regular IRA in that:

(It Is NOT "deposits must be in federally-insured accounts" or "contributions may exceed $2,000")

Which of the following are considered to be personal financial statements?

Balance sheet and cash flow statement

Ben Chase needs to pay off some of his debts over the next few months. Which item on his balance sheet would help him decide what amounts are due in the near future?

Current liabilities

Which type of tax is imposed on specific goods and services at the time of purchase?

Excise

Ed Bostrom wants to reduce his fixed expenses. What action would be appropriate?

Find a place to live with a lower rent

Which form would an individual use who has less than $50,000 in taxable income from wages, salaries, tips, unemployment compensation, interest, or dividends, and who is married and does not itemize deductions?

Form 1040A

Itemized deductions are recorded on:

Schedule A.

Nick Rodr has a savings account with $550 in it. He knows that he can withdraw this money from his savings account whenever he wishes: This would be an example of:

a liquid asset.

A deduction from adjusted gross income for yourself, your spouse, and qualified dependents is:

an exemption.

Money management refers to:

day-to-day financial activities.

The main purpose of taxes is to:

generate revenue for funding government programs.

Most people pay federal income tax by:

having amounts withheld from income.

Improvements in a person's financial position are the result of:

increased savings and investments.

A broker statement is an example of a(n) __________ record.

investment

An expense that would be included in the itemized deductions of a taxpayer is:

real estate property taxes.

If a family planned to spend $370 for food during March but only spent $348, this difference would be referred to as a:

surplus.

Tax-deferred retirement plans are a type of:

tax shelter.

Opportunity costs refer to:

trade-offs associated with financial decisions.

Parents can reduce their taxes by:

using a child-care tax credit.