EOPA - Technical Skills - Financial and Investment Planning

A business earns $100,000 in revenue but has expenses totaling $75,000. What is the net profit?

• $100,000

• $75,000

• $25,000

• $50,000

Debbie’s Diamond Jewelers had $12,000 in VISA® sales during the day. Debbie is charged a 4% discount rate on VISA® deposits. The correct entry to record the VISA® sales is:

• Debit Cash $11,520; Debit Credit Card Expense $480; Credit Sales $12,000

• Debit Cash $12,000; Credit Credit Card Expense $480; Credit Sales $12,000

• Debit Cash $12,000; Credit Sales $12,000

• Debit Cash $11,000; Debit Credit Card Expense $1,000; Credit Sales $12,000

Which of the following is NOT an asset on a balance sheet?

• Equipment

• Accounts payable

• Cash

• Inventory

A company's total assets are $500,000, and total liabilities are $200,000. What is the owner’s equity?

• $200,000

• $500,000

• $300,000

• $700,000

What is the main purpose of a financial budget?

• To predict future sales

• To control expenses and allocate resources

• To increase revenue

• To reduce taxes

Which of the following would be considered a fixed expense in a personal budget?

• Grocery bills

• Utility costs

• Mortgage or rent payments

• Entertainment expenses

An investor wants to lower their financial risk by spreading their investments across multiple asset types. This strategy is called:

• Speculation

• Compounding

• Diversification

• Arbitrage

A person deposits $5,000 into a savings account that earns 4% annual interest, compounded annually. How much will the account be worth after 2 years?

• $5,400

• $5,800

• $5,000

• $5,416

A credit card company charges an annual interest rate of 18%. What is the monthly interest rate?

• 1.5%

• 18%

• 9%

• 3%

What is the primary advantage of a Roth IRA over a traditional IRA?

• No taxes on withdrawals in retirement

• Contributions are tax-deductible

• No income limits for contributions

• Higher contribution limits