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WorksheetsPersonal Finance Unit 1b Review
Total questions: 40
Worksheet time: 40mins
Name
Class
Date
1.
Which is generally a true statement about the relationship between education and a person’s earning power?
a)
The more education the lower the income
b)
The more education the higher the income
c)
The less education the higher the income
2.
Money in an emergency fund should be used to pay for:
a)
Items that suddenly go on sale
b)
Large expenses such as a house or college education
c)
Long-term investments such as stocks
d)
Necessary expenses when a person loses a job or is unable to work because of illness or injury
3.
Emily’s car is worth approximately $5,300 but she still owes $1,600 on her loan. She also has $800 in a savings account. What is Emily’s net worth?
a)
$7,700
b)
$2,900
c)
$4,500
d)
$6,100
4.
Jamal makes $9 per hour and works 15 hours a week. He also gets a $25 per week allowance. What is Jamal’s annual gross income? [Hint: there are 52 weeks in a year]
a)
$8,320
b)
$190
c)
$9,000
d)
$2,548
5.
You have a car worth $3,200. You owe $1,400 on the loan. You also owe $320 on a credit card. How much are your total liabilities?
a)
$4,920
b)
$1,480
c)
$3,200
d)
$1,720
6.
Assume you took $2,500 in cash out of your savings account and bought a car worth $2,500. How much did your net worth change?
a)
+$2,500
b)
$0 (didn’t change)
c)
-$2,500
d)
$5,000
7.
A person can increases his net worth by:
a)
Buying a new car with a loan
b)
Making purchases with a credit or debit card
c)
Increasing assets and/or decreasing liabilities
d)
Transferring money from a savings account to a checking account
8.
Echo wants to put a $1,000 down payment on a car 10 weeks from now. She works about 10 hours per week at her current job. She brings home $8 an hour after taxes are withdrawn from her check. Is it possible for her to save the $1,000 if she has no other expenses?
a)
No, she will not make more than $1,000 in the next 10 weeks
b)
Yes, she will make more than $1,000 in the next 10 weeks
9.
Caleb expects to work an average of 12 hours a week during the next semester. Assuming he makes $9.50 an hour and works the entire 17 week semester, what is his forecasted income next semester? (This is his only job)
a)
$114
b)
$2,000
c)
$1,938
10.
Assume your phone bill averages $45 per month and you have a car payment that is $140 per month. You also spend about $20 a week on food. How much are your monthly expenses? [Hint: assume there are 4 weeks in the month]
a)
$265
b)
$205
c)
$245
11.
Can you afford to buy a $50 video game every month if you make $40 a week and spend an average of $150 a month on food and gasoline? [Hint: assume there are 4 weeks in the month]
a)
Yes
b)
No
12.
A financial plan should:
a)
Be followed as it is written until the goals set in the plan are achieved
b)
Only be revised when a person’s job changes
c)
Remain the same unless a person changes financial goals
d)
Be evaluated periodically and revised as needed
13.
Your grandma gives you a $1,000 gift. What happens to your net worth?
a)
It goes up
b)
It goes down
14.
According to your budget forecast you will have expenses of $1200 next month and income of $800. How much do you have available to save?
a)
$400
b)
$2400
c)
None, you are in debt
15.
Which is a true statement about a budget?
a)
A budget should always remain the same from month to month
b)
A person’s budget should be the same as other people with the same income
c)
When a person spends more than he has budgeted, he should reduce his cash inflow
d)
A budget should include both fixed and variable expenses
16.
A personal balance sheet:
a)
Shows how much is available each month to pay for necessities
b)
Is a picture of a person’s financial well-being at a point in time
c)
Shows how much money a person has available for savings
d)
Is used to determine if a person’s budget is realistic
17.
Which asset is the most liquid?
a)
Car
b)
House
c)
Savings account
18.
How does a person determine her net worth?
a)
Subtract investments from cash inflow
b)
Subtract liabilities from assets
c)
Add interest earned on investments to salary
d)
Add cash outflow to savings
19.
A good example of a well-stated financial goal is:
a)
Buy a $25,000 car
b)
Buy a house
c)
Become financially independent
d)
Pay off $5,000 in credit card debt in two years by eliminating restaurant purchases
20.
I find myself using my credit card to cover the cost of food or rent because I’m regularly short on cash at the end of each month. The best thing to do is:
a)
Make a budget and consider ways to reduce expenses or increase income
b)
Ignore it. Things are bound to get better.
c)
Borrow money from a relative
d)
Apply for additional credit cards
21.
How much money should you have in your emergency fund?
a)
1-3 months of income
b)
3-6 months of income
c)
6-9 months of income
d)
9-12 months of income
22.
Another term for the dollar amount of your paycheck after taxes and other withholdings is:
a)
Discretionary income
b)
Adjusted gross income
c)
Net income
d)
Gross income
23.
In creating her budget, Ann realizes that her expenses exceed her income. Ann should immediately try to:
a)
Apply for a loan
b)
Ignore her budget until she has more income
c)
Open an IRA account
d)
Reduce or eliminate some expenses
24.
The following is usually considered a variable expense:
a)
Electric bill payment
b)
Mortgage payment
c)
Rent payment
d)
Car payment
25.
Electricity and food expenditures are:
a)
Discreet expenses that do not have to be paid monthly
b)
Fixed expenses that remain the same from one period to another
c)
Personal expenses for an individual or family
d)
Variable expenses that change from one period to another
26.
Julian is a single and recent college graduate who just got his first full-time job. Which of the following should be his first financial goal?
a)
Buying a house
b)
Buying a life insurance policy
c)
Establishing a fund for emergencies
d)
Creating a stock portfolio
27.
Something you are working to achieve within a defined period of time is a(an):
a)
Value
b)
Goal
c)
Ideal
d)
Dream
28.
If expenses were to exceed income on a budget, what would be a financially smart solution?
a)
Decrease expenses
b)
Use a credit card more often
c)
Earn less income
d)
Increase purchases
29.
Michael wants to develop a budget 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 he has completed this step.
d)
Develop a control system that will work with his lifestyle.
30.
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
31.
To calculate her net worth Jordan 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
32.
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)
Samantha, because her annual income is higher than Maggie’s
d)
Maggie, because her net worth is higher than Samantha’s
33.
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
34.
To increase his net worth, Jackson could:
a)
Increase his assets
b)
Increase his liabilities
c)
Decrease his assets
d)
Increase his market value
35.
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 money than they are earning. They need to find a way to balance their income and expenses by spending less on fixed expenses.
b)
They are earning more money than they are spending. They could place additional money in savings and/or spending it on other expenses
c)
They 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)
They are earning more money than they are spending. They should increase their fixed expenses.
36.
Discretionary income is:
a)
Wages plus investment income
b)
A capital gain
c)
Money you have left over after budgeting your essential expenses
d)
Income that has been spent
37.
An example of a fixed expense is:
a)
Entertainment
b)
Apartment rent
c)
Restaurants
d)
Vacations
38.
Goals:
a)
Need to be realistic, have a target date, and if possible, an associated cost
b)
Remain the same year after year, throughout life
c)
Need to reflect current income
d)
Are generally the same for middle class families
39.
Which of the following provides an increase in assets or wealth?
a)
Volunteering at a hospital
b)
Taking out a loan
c)
Having capital gains
d)
Running in a marathon
40.
Which of the following statements is usually true about individuals who are financially literate?
a)
They have high debt and low savings
b)
They almost always choose stocks and bonds that increase in value
c)
They achieve all of their financial goals
d)
They understand the basics of personal finance and money management
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