Unit 2.000 Question Preview (ID: 49650)


Personal Finance. TEACHERS: click here for quick copy question ID numbers.

Who is Medicare designed to help?
a) low-income families
b) single parents
c) senior citizens
d) children of unemployed parents

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.

On Andy's Income and Expense Statement where should he record his expenses?
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, and his tax refund from filing last year’s tax
c) The scholarship he receives for studying Chinese at the community college, his car insurance payment, and stock dividends
d) Clothing he purchased for a job interview, tuition for a class he is taking, and interest from his savings account.

Maggie earns $62,000 per year and has a net worth of $20,000. Samantha earns $96,000 and has a net worth of $15,000. Who is wealthier?
a) Maggie, because her income minus her net worth is a smaller amount than Samantha’s.
b) Samantha, because her income minus her net worth is a larger amount than Maggie’s.
c) Maggie, because her net worth is higher than Samantha’s.
d) Samantha, because her annual income is higher than Maggie’s.

Recently, in a class at school, discussion focused on why depository institutions are safer than her piggy bank. Some student comments were based on fact while others were based on myths. Which about security at a depository institution is not true?
a) Depository institutions have insurance protection for up to $250,000 per depositor per account type so if something happened
b) AAmoney stored 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. Will cover multiple accounts as long as doesn't exceed a $100,000 balance.

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

Chase has decided to work with a spending plan so he can build up an emergency fund for when he is in college. He learned in class that he could probably reduce his spending the most by looking at his noncontractual expenses. Which expense is that?
a) cell phone bill, gasoline, and car payment
b) internet bill, entertainment and clothing
c) motorcycle payment, food, and cell phone bill
d) gasoline, food and entertainment

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
a) Property taxes are assessed at the same rate for all types of property, including homes, land and buildings
b) Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses
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 a year.

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 that is insured by the FDIC
b) A credit union is insured by the NCUA
c) Choose either as long as his savings account balance meets insurance requirements
d) Neither a commercial or credit union

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

Common fees that may be charged on savings or checking account include all except:
a) overdraft fees
b) late fees
c) ATM fees
d) Minimum balance fees

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
b) apply for a debit card
c) apply for a credit card
d) request a cashier's check

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

When is your spending plan complete?
a) When you have allocated all your income into categories for the month
b) When you have all of your current income and expenses recorded
c) Spending plans are always under revision so they are never complete.
d) Spending plans are complete each December 31st as one year ends and another year begins.

Michael wants to develop a spending plan for himself to use during his final year of high school. What will he need to do as his first step?
a) Decide what income and spending categories would reflect his values, needs, and wants.
b) Decide how much money he can spend for each of the bills he pays each month.
c) Track his current income and expenses—if he has already created an Income and Expense Statement then this step is done.
d) Develop a control system that will work with his life style.

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?
a) They are spending more than they are earning so they need to spend less on noncontractual expenses
b) They are earning more money than they are spending so should put additional money in savings or spend on other expenses.
c) They are spending more than they are earning. One should consider getting a second job to help boost income.
d) They are earning more than they are spending. They should increase spending on items to bring their income into balance.

To increase his net worth, Jackson could:
a) increase his liabilities
b) decrease his assets
c) increase his market value
d) increase his assets

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

Erin and her mother are putting together an Income and Expense Statement for Erin to use as she applies for a college scholarship. Which income source does she not need to include for this statement?
a) Interest earned on her savings account
b) Money she received from her grandparents for her birthday
c) Social Security income her mother is receiving for her since her father died of cancer last year
d) Taxes she paid based on her income last year

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

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