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ASK Practice-Financial Analysis

Total questions: 25

Worksheet time: 2hrs 5mins

Name
Class
Date
1.

When using a debit card to pay for goods and services, the funds are electronically transferred from a(n)

a)

interest or savings account

b)

expense or interest account

c)

savings or checking account

d)

checking or credit account

2.

The yen, peso, and euro are types of

a)

money

b)

bonds

c)

stocks

d)

dollars

3.

What function of money enables a person to save his/her wealth until it is needed?

a)

incentive

b)

unit of measure

c)

store of value

d)

medium of exchange

4.

Which of the following is a source of unearned income:

a)

commissions

b)

fees

c)

wages

d)

dividends

5.

Jorge is considering whether to invest $100 at his bank, but first, he wants know what his $100 will be worth in a year. To figure this out, Jorge needs to know the

a)

present value

b)

time value of money

c)

investment rate

d)

interest rate

6.

Franklin received his monthly statement from Friendship General Store. Franklin realized that the company had made a mistake and charged him twice for as set of speakers. He notified the company of this error and requested an investigation. A representative from Friendship informed Franklin that the company would look into this matter and provide a written explanation or correct the error within 90 days. The federal credit legislation that Friendship is complying with is known as the

a)

Fair Credit Reporting Act

b)

Equal Credit Opportunity Act

c)

Fair Credit Billing Act

d)

Truth-In Lending Act

7.

When the US federal government owes money to a contracted employee or business, the government must pay the employee or business according to the

a)

Secure Contracting Act

b)

Prompt Payment Act

c)

Government Guidelines Act

d)

Early Bird Act

8.

One of the main reasons why individuals make investments based on their future financial needs is to

a)

generate retirement income

b)

avoid paying taxes

c)

develop a living will

d)

set up a trust fund

9.

Emily has decided to use all of her savings to buy a new car instead of a used one. What are the opportunity costs of that decision?

a)

The money she saves by not having to constantly repair a used car

b)

The benefits she could have received by using public transportation instead

c)

The reliability and luxury of a new car compared to a used one

d)

The benefits she could have received by using the additional cost of a new car another way

10.

Which of the following are examples of expenses that should be considered when developing a personal budget:

a)

Rent, entertainment and insurance

b)

Insurance, dividends and utilities

c)

Food, utilities and salary

d)

Entertainment, wages and utilities

11.

What type of services do property taxes typically fund?

a)

Local fire departments and local law-enforcement agencies

b)

State/Provincial education programs and federal correctional facilities

c)

State/Provincial colleges and state/provincial social welfare intiatives

d)

National security programs and local road repairs

12.

Ingrid is preparing a deposit ticket for her small business's checking account. She has six checks in the following amounts: $42.36, $21.94, $118.28, $77.93, #17.29, and $56.47. Ingrid also has cash and coin in the following amounts: 46 $1 bills, 13 $5 bills, 11 $10 bills, 15 $20 bills, 88 dimes, and 64 quarters. Calculate Ingrid's total deposit.

a)

$880.07

b)

$890.47

c)

$897.07

d)

$887.47

13.

In what primary way does a T account benefit an accountant in maintaining financial records?

a)

Increases the accuracy of calcuations

b)

Heightens the awareness of spending problems

c)

Reveals the motives behind a purchase

d)

Shows the parts of a business transaction

14.

Because Elise paid her monthly credit-card bill on April 16 instead of April 4, the credit card issuer added a $25 charge to her May billing statement. This is an example of a(n)__________________fee.

a)

cash-advance

b)

late

c)

annual

d)

balance-transfer

15.

The primary reason that people review their personal credit reports is to

a)

verify that the credit agencies have correct information

b)

ensure that they obtain bank loans

c)

change or update their credit rating

d)

eliminate the risk of identity theft

16.

State Street Bank sends text messages to its customers when $100 or more are withdrawn from their bank accounts. The bank sends these notifications to reduce the risks associated with

a)

firewall intrusion

b)

money laundering

c)

identity theft

d)

loan fraud

17.

Lin ears $35,000 of taxable income a year. She's unmarried, has no dependents, and doesn't earn any money from interest. Which tax form should she file?

a)

1040

b)

Lin doesn't need to file taxes because of her income level

c)

1040A

d)

1040EZ

18.

Amira is trying to choose a financial institution. She likes to do her banking in person, and she wants to make sure she selects an institution that's customer friendly. She wants good interest rates and low fees, and she'd also prefer to invest with a not-for profit institution. Amira should invest her money into a(n)

a)

investment bank

b)

credit union

c)

internet bank

d)

commercial bank

19.

Adam wants to hire a financial-services provider who will provide him a wide variety of services, such as recommending insurance coverage, providing in-depth financial advice, and making investments on his behalf. What type of financial-services provider who be best suited to handle Adam's needs?

a)

full-service banker

b)

insurance agent

c)

discount broker

d)

beneficiary

20.

What is a benefit of investing in mutual funds?

a)

Investors earn interest because it is a lending investment

b)

Investors have access to a fund manager's expertise

c)

Investors' fees are waived because it is an ownership investment

d)

Investors are guaranteed a minimal amount of return

21.

When a business's insurance premiums are high, it is most often because the

a)

security is optional

b)

liability is low

c)

risk is high

d)

threats are minimal

22.

During its 20 years of operation, the Normandy Company has made very few changes to its accounting methods and systems. As a result, the company's financial information is likely to be very

a)

reliable

b)

conservative

c)

comparable

d)

consistent

23.

Which of the following would a business use in order to know how much money is available to hire more staff:

a)

Accounting information

b)

income statement

c)

journal

d)

profit and loss statement

24.

Accounting standards are necessary in business because

a)

Important decisions rely on accounting information

b)

math scores have dropped in recent years

c)

auditors need a way to evaluate businesses

d)

the government wants to know what businesses are doing

25.

Which of the following is a capital investment decision:

a)

How to finance investments

b)

how to manage inventory

c)

how to handle accounts payable

d)

how to manage cash flow