WorksheetsPersonal Finance Obj 2
Total questions: 27
Worksheet time: 27mins
Name
Class
Date
1.
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 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.
2.
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 institutions are safer than her piggy bank. Some students’ comments were based on fact while others were based on myths. Which aspect of 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 to the money in the bank, you would get it back as long as the deposited amount was no more than the insurance limit.
b)
All money 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. Depositors can have multiple accounts insured at the same depository institution as long as each account has no more than $100,000.
3.
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 either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements.
d)
Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.
4.
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. She has asked you for advice on which type of account would be best for her. 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 saved enough for her computer she can simply write a check to pay for it.
b)
Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer.
c)
Look for a Credit Union that offers share draft accounts. These secure accounts are designed especially for saving for long‐term financial goals.
d)
Shop around for a depository institution that offers safe deposit boxes. These accounts offer extra security for deposits and can be set up to allow her to withdraw her money when she needs it.
5.
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 she spends would automatically be deducted from her savings account.
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 is immediately deducted from her account.
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 statement comes from her checking account.
d)
Request a cashier’s check from her depository institution. That way she can spend money from her checking account without risk of an overdraft fee.
6.
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.
7.
Common fees that may be charged by a depository institution include all EXCEPT:
a)
overdraft fee
b)
late fee
c)
ATM fee
d)
minimum balance fee
8.
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(n):
a)
ATM fee
b)
contact fee
c)
safe deposit fee
d)
overdraft fee
9.
Which statement is TRUE about Payroll Taxes?
a)
Payroll taxes are paid 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.
10.
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 on the item. What is the extra 6% charge most likely to be?
a)
An excise tax on the shirt she purchased.
b)
Property tax on the shirt she purchased.
c)
Income tax on the shirt she purchased.
d)
Sales tax on the shirt she purchased.
11.
Who is Medicare designed to help?
a)
Low income families
b)
Single parents
c)
Senior Citizens
d)
Children of unemployed parents
12.
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 because it is not correct?
a)
Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use.
b)
Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses incurred by these governments.
c)
Property taxes are commonly paid on automobiles. This tax usually paid once per year when the automobile is licensed.
d)
a. Property tax on homes, land and buildings are usually only paid once or twice each year.
13.
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.
14.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called taxes.
a)
Sales
b)
Excise
c)
Federal use
d)
property
15.
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 that Austin’s pay is less than he expected it to be?
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.
16.
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
17.
To calculate her net worth Jordyn should use the following formula:
a)
Assets – liabilities = net worth
b)
Assets x liabilities = net worth
c)
Assets + liabilities = net worth
d)
Assets / liabilities = net worth
18.
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.
19.
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 of his credit card
20.
To increase his net worth, Jackson could:
a)
increase his liabilities
b)
decrease his assets
c)
increase his market value
d)
increase his assets
21.
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.
22.
Which of the following would most likely be considered a contractual expense?
a)
cell phone
b)
food
c)
entertainment
d)
clothing
23.
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. He is unsure which of the following items should be recorded as expenses. Which should be recorded as 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, his tax refund from filing last year’s tax return
c)
The scholarship he receives for studying Chinese at the local community college, 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 from his savings account
24.
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)
Amanda and Marcus are spending more money than they are earning. They need find a way to balance their income and expenses by spending less on non‐contractual expenses
b)
Amanda and March are earning more money than they are spending. They could place additional money in savings and/or spend it on other expenses
c)
Amanda and Marcus are spending more money than they are earning. One of them should consider getting a second job for a time to help boost their income
d)
Amanda and Marcus are earning more money than they are spending. They should increase spending for non‐contractual items to bring their income into balance with the expenses
25.
Diana and Aaron have decided to develop a spending plan to help them gain control over their finances. Which of the following statements 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 pending plan, it is recommended that you examine your trade‐offs and opportunity costs
26.
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 athis non‐contractual expenses. Which of his expenses best fit that category?
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
27.
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 ExpenseStatement then he has completed this step.
d)
Develop a control system that will work with his life style.
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