PF 2.00 Managing Your Money (1 Of 2) Question Preview (ID: 34624)
2.00 Managing Your Money.
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A key difference between commercial banks and credit unions is that: (2.01)
a) Commercial banks are ‘for‐profit’ and credit unions are ‘not‐for‐profit’
b) Commercial banks typically pay higher interest rates than credit unions.
c) Credit unions are more commonly located in rural area while commercial banks are more commonly located in urban areas.
d) Commercial banks offer more services, such debit cards, and online banking, than credit unions.
Which statement is not correct? (2.02)
a) Property taxes are assessed at the same rate for all types of property, whether they are used for business or personal use.
b) Property taxes usually pay for local schools and other services and expenses incurred by local governments.
c) Property taxes are commonly paid on automobiles. This tax usually paid once per year when the automobile is licensed.
d) Property tax on homes, land and buildings are usually only paid once or twice each year.
To calculate her net worth Jordyn should use the following formula: (2.03)
a) Assets – liabilities = net worth
b) Assets x liabilities = net worth
c) Assets + liabilities = net worth
d) Assets / liabilities = net worth
Which of the following would most likely be considered a contractual expense? (2.04)
a) Cell Phone
b) Food
c) Entertainment
d) Clothing
Which should be recorded as expenses? (2.04)
a) Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
b) Money saved from his paycheck for emergencies, interest paid on his car loan, his tax refund from filing last year’s tax ret
c) The scholarship he receives, his car insurance payment, and stock dividends he received from his grandmother
d) Clothing he purchased for a job interview, tuition for a class he is taking at the local community college, and interest fro
If expenses were to exceed income on a spending plan, what would be a financially smart solution? (2.05)
a) Decrease expenses
b) Use a credit card more often
c) Earn less income
d) Increase purchases
She has asked you for advice on which type of account would be best for her as she's saving money for a new computer. What would be the best advice? (2.01)
a) Shop for the highest interest rates for savings accounts. She could make deposits and earn interest while saving.
b) Choose a free, no‐interest checking account. That way, when Ariel has saved enough for her computer she can simply write a c
c) Look for a Credit Union that offers share draft accounts. These secure accounts are designed especially for saving for long‐t
d) Shop for safe deposit boxes, which offer extra security for deposits and can be set up to allow her to withdraw her money
Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest? (2.01)
a) When earning interest, look for low rates.
b) Interest is the price paid for using someone else’s money.
c) When paying interest, look for low rates.
d) The amount of interest earned or paid is determined by the interest rate.
Samantha wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do? (2.01)
a) Apply for a debit card to use instead of cash to purchase things; the amount spent is immediately deducted from her account
b) Apply for mobile banking. That way she can access her money with her smartphone to pay for the things she needs.
c) Apply for a credit card and use it to purchase things.
d) Request a cashier’s check. That way she can spend money from her checking account without risk of an overdraft fee.
Common fees that may be charged by a depository institution include all EXCEPT: (2.01)
a) Late fee
b) Overdraft fee
c) ATM fee
d) Minimum Balance fee
Which statement is NOT TRUE about property taxes? (2.02)
a) The property tax rate is set by the federal government to be equal in every state.
b) Property tax is often charged by states or local governments to pay for local schools.
c) The fee paid to license a vehicle is an example of property tax.
d) Property taxes are most often paid only once or twice each year.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called which kind of taxes? (2.02)
a) Excise
b) Sales
c) Federal use
d) property
Brett is creating a Statement of Financial Position and needs to list his assets. Which of the following should he NOT list as an asset? (2.03)
a) Money in the paycheck he will receive next week
b) Money in his checking account
c) His hockey equipment
d) The market value of his car
Amanda and Marcus just finished their Income and Expense Statement for last month. They discovered that they have a net gain. What does this mean and what should they do? (2.04)
a) They are earning more than they are spending. They could put more money in savings and/or spend it on other expenses.
b) They are spending more than they are earning. They need find a way to balance their income expenses by spending less
c) They are spending more than they are earning. One of them should consider getting a second job to help boost their income.
d) They are earning more than they are spending. They should decrease spending to balance their income with expenses.
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