Personal Finance 2.01-2.02 Study Guide Review Question Preview (ID: 45815)


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Which statement is true about payroll taxes?
a) Payroll taxes are paid on both earned and unearned income.
b) Payroll taxes fund different operations and programs of the federal government.
c) Payroll taxes fund the Social Security and Medicare programs.
d) The amount of tax paid depends on many different factors but increases as income increases.

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, including homes, land, and buildings, regardless of l
b) Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses in
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

Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method of saving because she can have immediate access to the money if she needs it. Recently, in a class at school, discussion focused on why depository institut
a) Depository institutions have insurance protection for up to $250,000 per depositor per account type so if something happened
b) All money stAll money stored at a deored at a depository institution is kept safe at all times by numerous security measures.
c) Information about depositors and their accounts is kept in secure data storage.
d) Depository institutions have insurance protection. Depositors can have multiple accounts insured at the same depository insti

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?
a) Apply for mobile banking. That way she can access her money with her smartphone to pay for the things she needs. The amount s
b) Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent i
c) Apply for a credit card. That way she can use the card to purchase the things she needs and pay for it when the credit card s
d) Request a cashier’s check from her depository institution. That way she can spend money from her checking account without ris

Common fees that may be charged on savings or checking accounts include all except:
a) Overdraft fees
b) Late fees
c) ATM fees
d) Minimum Balance fees

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

Savings tools offered by depository institutions may earn interest. Which of the following statements is not true about interest?
a) Interest is the price paid for using someone else’s money.
b) When earning interest, look for low rates.
c) When paying interest, look for low rates.
d) The amount of interest earned or paid is determined by the interest rate.

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. That way, when Ariel has save
b) Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to m
c) Look for a credit union that offers share draft accounts. These secure accounts are designed especially for saving for long-t
d) Shop around for a depository institution that offers safe deposit boxes. These accounts offer extra security for deposits and

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.

Dylan 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 either a commercial bank or a credit union, as long as his savings account balance meets the insurance
d) Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.

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.

Who is Medicare designed to help?
a) Low-income families
b) Single parents
c) Senior citizens
d) Children of unemployed parents

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 most likely reason t
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.

As Mariah was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag showed for the item. What is this extra 6% charge most likely to be?
a) An excise tax on the shirt she purchased
b) Income tax on the shirt she purchased
c) Sales tax on the shirt she purchased
d)

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

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