Principles of Business and Finance Final Exam

Bartering The earliest type of trade
Trade The economies of all cultures are based on
Metal currency Historians believe that the Chinese developed the first
corporate structure The way a business is organized
Quitting your job to find another Will not increase your present income
Find a second job and request a merit increase in pay What are effective options to pursue if you want to increase your income
Personal history Your resume should include all of the following information except
You can obtain jobs that have higher starting salaries The single best way to increase your income is to get an education because
A female accountant with a masters degree in business administration Which of the following will most likely earn a higher level of income?
Median There are an equal number of employees earning above the amount provided and an equal number earning below the amount provided
Average The number calculated by adding all numbers together then dividing by the total amount of numbers
educational attainment You have earned the highest degree possible in your field
Which of the following is true concerning income tax refunds? 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 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 An exclusion
A form of taxation in which everyone pays an equal rate of taxes is called a Flat tax
A form of taxation in which the highest income earner pays the largest percentage of taxes is called a Progressive tax
A form of taxation in which the lowest income earners pay the largest percentage of taxes is called a Regressive tax
Which of the following is not considered part of your gross income? The amount you receive in your paycheck
Which of the following is not true about your adjusted gross income It is your income plus your deductions
Which of the following is true about standard deductions They are tax breaks that you can claim without having to itemize
A dollar-for-dollar r├ęduction in your tax payment is called a Credit
Which of the following best defines health insurance Types of insurance whereby the insurer pays the medical costs of the insured
Which of the following illustrates the main difference between Medicare and Medicaid? Medicare helps to insure the elderly, Medicaid focuses on low-income individuals and families
Which of the following statements is true about managed care? Your employer is responsible for all co-payments
Which of the following is true about Medicaid? Medicaid was established to help ensure that people living below the poverty level could receive health care
What is life insurance? Insurance that assists your loved ones with income in the event of your death
John t works on an 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? He may potentially be covered by disability insurance provided by his employer until he returns to work.
A FICO score represents all of the following except 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 20% to 50% more
It takes _ to rebuild your credit history 7 years
Secured debt means a lender gives you money in exchange for Collateral
Unsecured debt Is the least attractive for a consumer
When an asset, such as a car, decreases in value over time what is it called Depreciation
If you miss one payment on a credit card what is generally the penalty? A late payment fee
If you miss two payments on a credit card what is generally the penalty A higher interest rate and a late payment fee
If you have $1,000 on a credit card and the interest rate is 23.7% per year, how much interest will you pay for one year? $237
How many monthly payments are there in a 30 year loan? 360
What can be the best type of safety net in hard times Mortgage
Generally you need to live in a home _ years to break even on closing costs Three
Real estate is considered a _ investment Illiquid
Individual mortgage interest rates are generally determined by what The individuals credit score
What is pmi Personal mortgage insurance
Who dictates how much insurance a homeowners must carry on their property The bank that holds the mortgage
assuming you have a 30 year fixed rate loan, you’re paying _ interest during the first few years 90%
Which of the following is not one of the three types of business arrangements in the United States? Sole partnership
With a sole proprietorship, who pays the taxes ? The owner
Which of the following would not be considered an advantage of a sole proprietorship? A proprietor is also responsible for his or her own health insurance
What can a proprietor do to minimize personal risk and liability? Form a limited liability company
Why are partnerships often favored over corporations? A partnership structure illuminates the dividend tax levied upon profits realized by the owners
Which of the following would not be considered an advantage of a partnership Each general partner is deemed the agent of the partnership
Who regulates a corporation The government of the state, province, or national government with which it is registered
What is an entrepreneur One who opens a new business
Which of the following is the best definition of probable operating costs Amounts of money required to keep a business running
What may be offered to clients when banks find the risk too high Private money
What is the term used widely among real estate investors to refer to nontraditional means of real estate financing, or financing techniques not commonly used Creative financing
What does OPM stand for in leveraging OPM Other people’s money
Generally, alone obtained from the bank will be a _ loan Term
Which of the following is not a type of retail bank Bond bank
What types of banks were traditionally banks which engaged in trade financing Merchant
Which of the following is not a core module of accounting Debt collection
What is a general ledger also known as A nominal ledger
Which of the following is not one of the seven basic accounting categories Investment
The listing of the account names in the sum of the account balances is called what A trial balance
All of the following should be included in a general ledger Date, description, total amount for each account
What kind of statement is also known as a profit and loss statement Income statement
Which kind of statement shows how changes in balance sheet and income accounts affected cash and cash equivalents Cash flow statement
A balance sheet is often described as a Snapshot of the company’s financial condition on a given date
What is the purpose of an income statement To Show managers and investors whether the company made when lost money during the period being reported
The two components of _ are variable costs and fixed costs Total cost
What is the margin of safety How much sales can fall before business starts taking a loss
What are expenses that change as conditions change Variable costs
What are expensive that do not change called Fixed costs
Rent and property taxes Are examples of possible fixed costs
What is known as the rate of business expansion through increasing out to put in sales as opposed to mergers, Acquisitions, and takeovers Organic growth
What is known as the rate at which business expands by increasing output in business reach Inorganic growth
What is another term for profit planning Profit mapping
What is known as the price at which a seller projects that a buyer will buy a product Target price
Which of the following might not be an option for increasing your present income Quitting your job to find another
Which of the following is true about a merit increase in pay You might have to wait for a certain
Corporate structure may be defined as The way a business is organized
Your resume should include all the following information except Personal history
The single best way to increase your income is to get an education. Why You can obtain jobs that have higher starting salaries
The term educational attainment means whatever education you have earned
Which of the following would not be considered an advantage of a sole proprietorship A proprietor is also responsible for his or her own health insurance
What can a proprietor do to minimize personal risk and liability Form a limited liability company
Wire partnerships often favored over corporations A partnership structure illuminates the dividend tax levied upon profits realize by the owners
What are the two types of partnerships Limited and general
As a generic legal term corporation means Any group of persons with a legal entity
Which of the following is not a legal characteristic of a corporation Legal protection from lawsuits
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 An exclusion
What is life insurance Insurance that assists your loved ones with income in the event of your death
Which of the following statements is not true about HMO insurance In an HMO you can choose your own primary care physician PCP but specialist must be referred by the PCP
Which of the following might be considered positive aspects of HMO’s Out of pocket expenses are usually low
Which of the following would be considered a negative aspect of HMOs not easy to receive specialized care
Secured debt means a lender gives you money in exchange for what Collateral
When it asset, such as a car, decreases in value over time what is it called Depreciation
What are expenses that do not change called Fixed costs
Why is investing in gold beneficial It is considered a stable investment

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