NEW
Font size
WorksheetsUnit 2.0 Preassessment - Principle of Managing Your Money
Total questions: 20
Worksheet time: 53mins
Common fees that may be charged on savings or checking accounts include all except:
Overdraft fees
Late fees
ATM fees
Minimum balance fees
Dylan is concerned about the safety of the money in his savings account. Which type of depository institution should he choose?
A commercial bank, since his deposits would be insured by the Federal Deposit Insurance Corporation (FDIC)
A credit union, since his deposits would be insured by the National Credit Union Association (NCUA)
He could safely choose either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements
Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.
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?
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.
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.
Look for a credit union that offers share draft accounts. These secure accounts are designed especially for saving for long-term financial goals.
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.
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?
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.
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.
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.
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.
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 student comments were based on fact while others were based on myths. Which aspect of security at a depository institution is not true?
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.
All money stored at a depository institution is kept safe at all times by numerous security measures.
Information about depositors and their accounts is kept in secure data storage.
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 a $100,000 balance.
Savings tools offered by depository institutions may earn interest. Which of the following statements is not true about interest?
Interest is the price paid for using someone else’s money.
When earning interest, look for low rates.
When paying interest, look for low rates.
The amount of interest earned or paid is determined by the interest rate.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called which kind of taxes?
Sales
Excise
Federal use
Property
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?
Property taxes are assessed at the same rate for all types of property, including homes, land, and buildings, regardless of location or whether they are used for business or personal use.
Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses incurred by these governments.
Property taxes are commonly paid on automobiles. This tax is usually paid once per year when the automobile is licensed.
Property taxes on homes, land, and buildings are usually only paid once or twice each year.
Which statement is true about payroll taxes?
Payroll taxes are paid on both earned and unearned income.
Payroll taxes fund different operations and programs of the federal government.
Payroll taxes fund the Social Security and Medicare programs.
The amount of tax paid depends on many different factors but increases as income increases.
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?
An excise tax on the shirt she purchased
Income tax on the shirt she purchased
Sales tax on the shirt she purchased
Medical tax on the shirt she purchased
Who is Medicare designed to help?
Low income families
Single parents
Senior citizens
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 that Austin’s pay is less than he expected it to be?
Austin calculated the hours he worked without deducting the hours he spent doing on-the-job training.
Austin neglected to deduct the excise tax paid on the uniforms he purchased to wear at his job.
Austin neglected to deduct the amount required to pay income and payroll taxes.
Austin’s employer made a mistake calculating the number of hours Austin worked during his first pay period.
Jonah is writing down his liabilities to complete his Statement of Financial Position. The item he should include would be:
the market value of his car.
the value of his retirement account.
the combined total of his savings and checking accounts.
the balance on his credit card.
To increase his net worth, Jackson could:
increase his liabilities.
decrease his assets.
increase his market value.
increase his assets.
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?
Maggie, because her income minus her net worth is a smaller amount than Samantha’s.
Samantha, because her income minus her net worth is a larger amount than Maggie’s.
Maggie, because her net worth is higher than Samantha’s.
Samantha, because her annual income is higher than Maggie’s.
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?
Interest earned on her savings account
Money she received from her grandparents for her birthday
Social Security income her mother is receiving for her since her father died of cancer last year
Taxes she paid based on her income last year
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 items should be recorded as expenses. Which should be recorded as expenses?
Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
Money saved from his paycheck for emergencies, interest paid on his car loan, and his tax refund from filing last year’s tax return
The scholarship he receives for studying Chinese at the local community college, his car insurance payment, and stock dividends he received from his grandmother
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
If expenses were to exceed income on a spending plan, what would be a financially smart solution?
Decrease expenses
Use a credit card more often
Earn less income
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 of his expenses best fit that category?
Cell phone bill, gasoline, and car payment
Internet bill, entertainment, and clothing
Motorcycle payment, food, and cell phone bill
Gasoline, food, and entertainment
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?
Decide what income and spending categories would reflect his values, needs, and wants.
Decide how much money he can spend for each of the bills he pays each month.
Track his current income and expenses—if he has already created an Income and Expense Statement then he has completed this step.
Develop a control system that will work with his life style.
