Personal Finance - Unit 2 (Part 2) Question Preview (ID: 41155)

Part 2.[print questions]

Which statement is not true about property taxes?
a) Property tax is often charged by states or local governments to pay for local schools.
b) The property tax rate is set by the federal government to be equal in every state.
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.

A key difference between commercial banks and credit unions is that:
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 areas while commercial banks are more commonly located in urban areas.
d) commercial banks offer more services, debit cards, and online banking than credit unions.

Diana and Aaron have decided to develop a spending plan to help them gain control over their finances. Which statement is not true about spending plans?
a) Spending plans are used to record planned income.
b) Spending plans are used to record planned expenses.
c) A spending plan includes items not usually included when creating a budget.
d) When creating a spending plan, it is recommended that one examines trade-offs and opportunity costs.

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?
a) Money in his checking account
b) Money in the paycheck he will receive next week
c) His hockey equipment
d) The market value of his car

David made a mistake in his checking account recordkeeping and spent $10 more than he had deposited in his account. As a result, he can expect to be charged a/an:
a) ATM fee.
b) contact fee.
c) safe deposit fee.
d) overdraft fee.

Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called which kind of taxes?
a) Sales
b) Excise
c) Federal use
d) Property

Austin has just received his first paycheck. He worked 22 hours at his new job and is being paid $8.00 per hour. He calculated that his paycheck should be $176. His paycheck amount is almost 1/3 less than he expected. What is the reason?
a) Austin calculated the hours he worked without deducting the hours he spent doing on-the-job training.
b) Austin neglected to deduct the excise tax paid on the uniforms he purchased to wear at his job.
c) Austin neglected to deduct the amount required to pay income and payroll taxes.
d) Austin’s employer made a mistake calculating the number of hours Austin worked during his first pay period.

Amanda and Marcus just finished their Income and Expense Statement for last month. They discovered that they hanet gain. What does this mean and what should they do?ve a
a) are spending more money than they are earning. They need find a way to spend less on noncontractual expenses
b) They are earning more money than they are spending. They could place more money in savings and/or spend it on other expenses
c) They are spending more money than they are earning. One of them should consider getting a second job
d) They are earning more then spending. They should increase spending for noncontractual items and balance income and expenses.

Sanjay is concerned about the safety of the money in his savings account. Which type of depository institution should he choose?
a) A commercial bank, since his deposits would be insured by the Federal Deposit Insurance Corporation (FDIC)
b) A credit union, since his deposits would be insured by the National Credit Union Association (NCUA)
c) He could safely choose a commercial bank or a credit union, as long as his savings balance meets insurance requirements
d) Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.

Andy is developing an Income and Expense Statement. He has gathered all his receipts, bank statements, paycheck stubs, and spending records. He needs to categorize them into income and expenses. Which should be recorded as expenses?
a) Money saved for emergencies, interest paid on his car loan, and his tax refund from filing last year’s tax return
b) Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
c) A scholarship he receives for for college, his car insurance payment, and stock dividends he received from his grandmother
d) Clothing bought for a job interview, tuition for a classes he is taking, and interest from his savings account

Dane is researching the topic of property taxes for a presentation he is doing in his Personal Finance class. He has come across the following statements he is considering adding to his presentation. Which should he exclude from his presentation beca
a) Property taxes are assessed at the same rate for all types of property regardless of location or property use.
b) Property taxes are charged by state and local governments to pay for schools and other expenses incurred
c) Property taxes are commonly paid on automobiles. This tax is usually paid once per year when the automobile is licensed.
d) Property taxes on homes, land, and buildings are usually only paid once or twice each year.

Which would most likely be considered a contractual expense?
a) Cell phone
b) Food
c) Entertainment
d) Clothing

Ariel is saving money to purchase a new computer before she leaves for college in two years. She wants to open a special account at a depository institution to keep her saved money safe. What would be the best advice for Ariel?
a) Check several depository institutions and choose one with a free, no-interest checking account.
b) Shop around for the depository institution with the highest interest rates for their savings accounts so she can earn intrest
c) Look for a credit union that offers share draft accounts. These secure accounts are designed for saving for long-term.
d) Shop around for a depository institution that offers safe deposit boxes.

Jonah is writing down his liabilities to complete his Statement of Financial Position. The item he should include would be:
a) the market value of his car
b) the value of his retirement account.
c) the combined total of his savings and checking accounts.
d) the balance on his credit card.

If expenses were to exceed income on a spending plan, what would be a financially smart solution?
a) Decrease expenses
b) Use a credit card more often
c) Earn less income
d) Increase purchases

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