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Finance Flashcards

Personal Finance Final

Corporate structure may be defined as _____.A. the way a corporate building is structuredB. the way a business is organizedC. whether or not a company pays corporate taxesD. the method a company uses to pay its employees The way a business is organized
Which of the following might not be an option for increasing your present income?A. Requesting a promotionB. Requesting a merit increase in payC. Quitting your job to find anotherD. Looking for a better job without quitting your old job Quitting your job to find another
Which of the following are effective options to pursue if you want to increase your income? Select all that apply.A. Quit your job immediately and look for a new one that pays more.B. Demand a promotion.C. Find a second job.D. Request a merit increase in pay. Find a second job & Request a merit increase in pay
Your resume should include all of the following information EXCEPT:A. contact information.B. personal history.C. education background.D. qualifications. Personal History
The single best way to increase your income is to get an education. Why?A. You automatically make more money if you are educated.B. You automatically get promotions if you are educated.C. You can obtain jobs that have higher starting salaries.D. You will automatically receive better benefits. You can obtain jobs that have higher starting salaries.
Which of the following will most likely earn a higher level of income?A. A female file clerk with a high school diploma and a year of college.B. A male file clerk with a high school diploma and a year of college.C. A male accountant with a Bachelor’s degree.D. A female accountant with a Master’s degree. in business administration. A female accountant with a Master’s degree. in business administration.
The term median means _____.A. there are an equal number of employees earning above the amount provided and an equal number earning below the amount providedB. there are an equal number of employees earning above the amount provided but not an equal number earning below the amount providedC. there are an equal number of employees not earning above the amount provided but an equal number of employees earning below the number providedD. the number calculated by adding all numbers together, then dividing by the total amount of numbers There are an equal number of employees earning above the amount provided and an equal number earning below the amount provided
The term average means _____.A. there are an equal number of employees earning above the amount provided and an equal number earning below the amount providedB. there are an equal number of employees earning above the amount provided but not an equal number of employees earning below the amount providedC. there are equal number of employees not earning above the amount provided but an equal number of employees earning below the amount providedD. the number calculated by adding all numbers together, then dividing by the total amount of numbers The number calculated by adding all numbers together, then dividing by the total amount of numbers
The term “educational attainment” means _____.A. you have earned a degreeB. you are attending school to earn a degreeC. whatever education you have gottenD. you have earned the highest degree possible in your field Whatever education you have gotten
Which of the following factors should be considered when deciding on a career choice? Select all that apply.A. job requirements, including educational levelB. your short-term goalsC. your skills and interestsD. ease of job search Job requirements, including educational level & your skills and interests
Which of the following is not true concerning Income Tax Refunds?A. It is advantageous to receive a large sum of money in the form of a refund so that you can use the money to pay down debt.B. You are essentially giving the government an interest-free loan.C. It means that you are having too much deducted from your paycheck.D. You haven’t properly evaluated your personal tax circumstances. It is advantageous to receive a large sum of money in the form of a refund so that you can use the money to pay down debt.
When claiming dependents, they must meet the following criteria EXCEPT:A. the dependent must be a relative.B. the dependent must reside with you for the entire year.C. the dependent must be under nineteen years of age unless he or she is a full-time student (under 24 years old).D. the dependent was unable to provide over half of his or her support for the year. the dependent must reside with you for the entire year.
If you opt to put money in a medical flexible spending account rather than trying to amass enough medical expenses to itemize on your tax return, you are taking advantage of _____.A. a creditB. withholdingC. a deductionD. an exclusion an exclusion
A form of taxation in which everyone pays an equal rate of taxes is called a _____.A. progressive taxB. regressive taxC. flat taxD. net tax flat tax
A form of taxation in which the highest income earner pays the largest percentage of taxes is called a _____.A. progressive taxB. regressive taxC. flat taxD. net tax progressive tax
A form of taxation in which the lowest income earners pay the largest percentage of taxes is called a _____.A. progressive taxB. regressive taxC. flat taxD. net tax regressive tax
Which of the following is not considered part of your gross income?A. interest from bank accountsB. the amount you receive as a bonusC. your salaryD. money your employer pays for your medical insurance money your employer pays for your medical insurance
Which of the following is not true about your adjusted gross income?A. It is your income minus deductionsB. It is your income plus your deductionsC. It determines whether you are eligible for additional tax breaksD. It is your gross income minus deductions It is your income plus your deductions
Which of the following is true about standard deductions?A. They are tax breaks that you can claim without having to itemizeB. They are listed just above the total taxable income on the 1040 tax formC. They reduce your tax bill rather than your taxable incomeD. You must itemize in order to take advantage of this deduction They are tax breaks that you can claim without having to itemize
A dollar-for-dollar reduction in your tax payment is called a _____.A. deductionB. flat taxC. creditD. debit credit
Which of the following best defines health insurance?A. An annual contract between an insurance company and an individualB. A type of insurance whereby the insurer pays the medical costs of the insuredC. A type of insurance that protects your personal property if you are unable to pay your billsD. A type of insurance that assists your loved ones in the event of your death A type of insurance whereby the insurer pays the medical costs of the insured
Which of the following illustrates the main difference between Medicare and Medicaid?A. Medicare helps to insure the elderly, while Medicaid focuses on low-income individuals and families.B. Medicaid helps to insure the elderly, while Medicare insures low income earners.C. Medicaid helps to replace lost income for the poor.D. Medicare is available only to those over the age of 65. Medicare helps to insure the elderly, while Medicaid focuses on low-income individuals and families.
Which of the following is not true about managed care?A. The most common types of managed care are HMO’s and PPO’s.B. Your employer is responsible for all co-payments.C. It is a system in which companies contract with doctors to provide health care services.D. If you have health care coverage through your employer, you probably have a managed care plan. Your employer is responsible for all co-payments.
Which of the following statements is true about Medicaid?A. Medicaid covers only hospital and doctor’s visits.B. Medicaid is a managed health care system.C. Medicaid was established to help ensure that people living below the poverty level could receive health care.D. Medicaid provides health care only for elderly veterans. Medicaid was established to help ensure that people living below the poverty level could receive health care.
What is life insurance?A. Health insurance that covers you for the rest of your lifeB. Insurance that supplements your income if your life in threatenedC. Insurance that protects you in the event of an unexpected illness or accident that prevents you from workingD. Insurance that assists your loved ones with income in the event of your death Insurance that assists your loved ones with income in the event of your death
John T. works on the assembly line in an automobile factory. One day, he falls off the roof of his home while cleaning his rain gutters and injures his back. He soon learns that he will have to be off his job for close to a year while his back heals. Which of the following insurance will he need to cover losses from his absence?A. He will be covered by disability insurance for a period of three months.B. He may potentially be covered by disability insurance provided by his employer until he returns to work.C. He will have to collect from his regular medical insurance.D. Because the accident occurred at home, he is not covered. He may potentially be covered by disability insurance provided by his employer until he returns to work.
Which of the following statements is not true about HMO insurance?A. It is a managed health care system.B. The letters stand for Health Maintenance Organization.C. In an HMO, you are assigned a primary care physician.D. In an HMO you can choose your own primary care physician (PCP), but specialists must be referred by the PCP. In an HMO you can choose your own primary care physician (PCP), but specialists must be referred by the PCP.
Which of the following statements is not true about disability insurance?A. The only way to get disability insurance in through your employer.B. You can have short-term or long-term disability insurance.C. Long-term disability insurance ends when a person turns 65.D. Long-term disability insurance usually lasts five years. The only way to get disability insurance in through your employer.
Which of the following might be considered positive aspects of HMO’s?A. Free choice of primary care physicianB. Care from non-HMO provider not coveredC. Out-of-pocket expenses are usually lowD. Easy to receive specialized care Out-of-pocket expenses are usually low
Which of the following might be considered a negative aspect of HMO’s?A. Out-of-pocket expenses are usually high.B. HMO’s focus on preventative care.C. Not easy to receive specialized careD. Free choice of primary care physician Not easy to receive specialized care
A FICO® score represents all of the following EXCEPT:A. the amount of money in your retirement account.B. income to debt ratio.C. creditworthiness.D. length of credit history. the amount of money in your retirement account.
On average, compared to a person with good credit, a person with poor credit will pay _____ for insurance?A. 5% to 10% moreB. 10% to 15% lessC. 20% to 50% moreD. 25% to 40% more 20% to 50% more
How long does it take to rebuild your credit history?A. 8 yearsB. 7 yearsC. 9 yearsD. 30 years 7 years
Secured debt means a lender gives you money in exchange for what?A. CollateralB. Credit reportC. PrincipalD. Interest Collateral
Which type of debt is the least attractive for a consumer?A. Unsecured debtB. Secured debtC. Mortgage debtD. Lease debt Unsecured debt
When as asset, such as a car, decreases in value over time what is it called?A. FinancingB. EquityC. LeasingD. Depreciation Depreciation
If you miss one payment on a credit card, what is generally the penalty?A. A higher interest rateB. A lower available credit lineC. A late payment feeD. A negative notation on your credit report A late payment fee
If you miss two payments on a credit card, what is generally the penalty?A. A higher interest rate and a late payment feeB. A late payment fee and a lower available credit lineC. A late payment feeD. A negative notation on your credit report A higher interest rate and a late payment fee
If you have $1,000.00 on a credit card and the interest rate is 23.7% per year, how much interest will you pay for one year? (Multiply rather than compound your interest.)A. $2,370.00B. $23.70C. $237.00D. $230.70 $237.00
How many monthly payments are there in a 30-year loan?A. 30B. 365C. 360D. 100 360
What can be the best type of safety net in hard times?A. GamblingB. MortgageC. Rental propertyD. None of the above Mortgage
Generally, you need to live in a home ________years to break even on closing costs.A. OneB. TwoC. ThreeD. Four Three
What is generally the most complicated financial transaction the average American will ever undertake?A. Buying a boatB. Buying a carC. Buying a homeD. None of the above Buying a home
Real estate is considered a/an ________investment.A. IlliquidB. LiquidC. SureD. Partially-liquid Illiquid
Individual mortgage interest rates are generally determined by what?A. The economyB. The individual’s credit scoreC. The property valueD. The state the property is located in The individual’s credit score
What is PMI?A. Personal mortgage issuanceB. Personal mortgage investmentC. Personal mortgage insuranceD. Personal mortgage interest Personal mortgage insurance
Who dictates how much insurance a homeowners must carry on their property?A. The state the property is located inB. The bank that holds the mortgageC. The ownerD. None of the above The bank that holds the mortgage
Assuming you have a 30-year fixed-rate loan, you’re paying _____% interest during the first few years.A. 90B. 80C. 70D. 60 90
Why is investing in gold beneficial?A. It is easy to mine.B. It is considered a stable investment.C. Gold is more expensive than stocks.D. The value of gold is subject to inflation. It is considered a stable investment.
What type of insurance may a homeowner need?A. Hurricane insuranceB. Flood insuranceC. Firestorm insuranceD. All of the above All of the above
Which of the following is not one of the three types of business arrangements in the United States?A. Sole proprietorshipB. PartnershipC. Sole partnershipD. Corporation Sole partnership
With a sole proprietorship, who pays the taxes?A. The shareholdersB. The companyC. Both the shareholders and the ownerD. The owner The owner
Which of the following would not be considered an advantage of a sole proprietorship?A. Decisions can be made quickly without having to consult others.B. A proprietor is also responsible for his or her own health insurance.C. There are no legal formalities if the business dissolves.D. All of the profits from the business go right to the owner. A proprietor is also responsible for his or her own health insurance.
What can a proprietor do to minimize personal risk and liability?A. Change his/her nameB. Form a limited liability proprietorshipC. Form a limited liability partnershipD. Form a limited liability company Form a limited liability company
Why are partnerships often favored over corporations?A. They have more power.B. They are more successful.C. There are no taxes levied on profits.D. A partnership structure eliminates the dividend tax levied upon profits realized by the owners. A partnership structure eliminates the dividend tax levied upon profits realized by the owners.
What are the two types of partnerships?A. Limited and soleB. General and privateC. Limited and generalD. Private and limited Limited and general
Which of the following would not be considered an advantage of a partnership?A. A partnership usually involves low start-up costs.B. Each general partner is deemed the agent of the partnership.C. It’s easy to form a partnership.D. You can share the responsibilities with your partners. Each general partner is deemed the agent of the partnership.
As a generic legal term, ___________ means any group of persons with a legal entity.A. CorporationB. BusinessC. PartnershipD. Proprietorship Corporation
Who regulates a corporation?A. the government of the state, province, or national government with which it is registeredB. the bondholdersC. the corporation’s foundersD. the corporation’s union the government of the state, province, or national government with which it is registered
Which of the following is not a legal characteristic of a corporation?A. Transferable sharesB. Perpetual lifeC. Limited liabilityD. Legal protection from law suits Legal protection from law suits
What is an entrepreneur?A. a sole proprietorshipB. a corporationC. one who opens a new businessD. a bank that loans money one who opens a new business
Which of the following is the best definition of probable operating costs?A. Amount of money required to start a businessB. Amount of money required to market a businessC. Amount of money required to purchase business equipmentD. Amount of money required to keep a business running Amount of money required to keep a business running
What may be offered to clients when banks find the risk too high?A. Proprietary moneyB. Private moneyC. Personal moneyD. Partnership money Private money
Which of the following is a start-up cost associated with opening a business?A. EquipmentB. Legal fees/LicensingC. InsuranceD. All of the above All of the above
What is a term used widely among real estate investors to refer to non-traditional means of real estate financing, or financing techniques not commonly used?A. Common financingB. Capital financingC. Leverage financingD. Creative financing Creative financing
What does “OPM” stand for in leveraging OPM?A. Organizational profit managementB. Other profit meansC. Other people’s moneyD. Organizational profit marketing Other people’s money
Generally, a loan obtained from a bank will be a loan.A. TaxedB. TermC. VariableD. Collateral-free Term
Which of the following is not a type of retail bank?A. Bond bankB. Private bankC. Offshore bankD. Ethical bank Bond bank
What type of banks were traditionally banks which engaged in trade financing?A. PrivateB. MerchantC. EthicalD. Offshore Merchant
Which of the following is an example of an unsecured bank loan?A. Credit card debtB. Bank overdraftsC. Corporate bondsD. All of the above All of the above
Which of the following is not a core module of accounting?A. Accounts receivableB. Accounts payableC. Debt collectionD. Purchase orders Debt collection
What is a general ledger also known as?A. A normal ledgerB. A nominal ledgerC. An enumerated ledgerD. None of the above A nominal ledger
Which of the following is not one of the seven basic accounting categories?A. AssetB. GainsC. LossesD. Investment Investment
The listing of the account names and the sum of the account balances is called what?A. A total balanceB. A complete balanceC. An absolute balanceD. A trial balance A trial balance
Which of the following should be included in a general ledger?A. DateB. DescriptionC. Total amount for each accountD. All of the above All of the above
What kind of statement is also known as a profit and loss statement?A. Complete statementB. Income statementC. Investment statementD. Earnings statement Income statement
What kind of statement shows how changes in balance sheet and income accounts affected cash and cash equivalents?A. Cash flow statementB. Investment statementC. Earnings statementD. Income statement Cash flow statement
A balance sheet is often described as a of the company’s financial condition on a given date.A. PictureB. SnapshotC. PhotoD. Slideshow Snapshot
What is the purpose of an income statement?A. To show managers and investors whether the company is up-to-date on taxesB. To show managers and investors whether the company is spending its money appropriatelyC. To show managers and investors whether the company made or lost money during the period being reportedD. None of the above To show managers and investors whether the company made or lost money during the period being reported
The two components of are variable costs and fixed costs.A. Entire costB. Total costC. Complete costD. Required cost Total cost
What is the margin of safety?A. How much sales can fall before a business starts making less 5%B. How much sales can fall before a business starts taking a lossC. How much sales can fall before a business makes less than 15%D. None of the above How much sales can fall before a business starts taking a loss
What are expenses that change as conditions change?A. Fixed costsB. Moderate costsC. Variable costsD. Changing costs Variable costs
What are expenses that do not change called?A. Given costsB. Known costsC. Stable costsD. Fixed costs Fixed costs
Which of the following are examples of possible fixed costs?A. Wages of workersB. Raw materialC. Neither of the aboveD. Both of the above Neither of the above
Which of the following are examples of possible fixed costs?A. RentB. Property taxesC. Both of the aboveD. None of the above Both of the above
What is known as the rate of business expansion through increasing output and sales as opposed to mergers, acquisitions, and takeovers?A. Organic growthB. Corporate growthC. Inorganic growthD. Monetary growth Organic growth
What is known as the rate at which business expands by increasing output and business reachA. Organic growthB. Corporate growthC. Inorganic growthD. Monetary growth Inorganic growth
What is another term for profit planning?A. Profit zoningB. Profit mappingC. Profit predictingD. Profit sharing Profit mapping
What is known as the price at which a seller projects that a buyer will buy a product?A. Target priceB. Selling priceC. Perfect priceD. Profit price Target price

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