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WorksheetsBusiness Test study guide review
Total questions: 60
Worksheet time: 30mins
Items that you own that have monetary value are referred to as
Income
Variable expenses
Liabilities
Assets
Which of the following will increase the net worth of a household?
Increase amount borrowed for major purchases
Decrease amount owed on credit cards
Increase spending by $5 per day
An investor should expect to recieve a risk premium for....
Lower consumer prices
Expected lower inflation
Higher intrest rates
Higher uncertainty about getting his/her money back
To develop financial goals, one should.....
Only set long term goals after short term goals have been accomplished
Identify specific, realistic goals that are measurable along with a time frame an an action plan.
Focus on intermediate goals first
An example of a variable expense is a.....
Installment loan payment
Monthly train ticket for commuting to work
Electric Bill
this is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels.
Estate Tax
Sales Tax
Income Tax
A worker's primary goal should be.....
Pay no income taxes
Pay no taxes of any type
Pay his or her taxes using estimates for income and deductions
pay his or her fair share of taxes while taking advantage of appropriate tax benefits
Which of the following financial documents would most likely be stored in a safe deposit box or fireproof home safe?
Bank statements
W-2 form
Marriage certificates
A family with $100,000 in assets and $60,000 of liabilities would have a net worth of...
$60,000
$100,000
$20,000
$40,000
Tim Taylor recieved a $500 gift from his granparents. He wants to invest this money for the down payment of a house that he plan to purchase in 3yrs. What type of computation should he use?
Future value of an annuity
Present value of an annuity
Future value of a single amount.
Tanya is a single low-income working parent, and Fred is a single high-income working parent. Because of her status, Tanya, But not Fred, may be eligible for the...
Withholding credit
Alternative minimum tax
Earned-income credit
Steve Wilson wants to deposit $150 per month into an account earning 4% for the next 3yrs so he can purchase a used car at that time. What type of computation would he use to determine the amount he will have accumulated for his purchase?
Present value of an annuity
Future value of an annuity
simple intrest
Future value of a single amount
Income that is taxed at a later date is.....
Adjusted gross income
Tax-deffered income
Earned income
Exclusions from income
Rebecca Wilson budgeted $395 for a new wardrobe in June. She actually spent $425 what is her budget variance?
$425 deficit
$25 Surplus
$30 deficit
Which of the following is an example of a financial oppurtunity cost?
Renting an apartment near school
Using a personal computer for financial planning
Forgoing wages to attend school
A tax imposed on the value of a person's property at the time of death is called a:
Income tax
Estate tax
Excise tax
Which of the following appears as a cash outflow on a cash flow statement?
Loan Payment
Net Worth
Home Value
Balance mortgage
The document that would tell you what you recieved and spent over the past month is the..
Budget
Bank statement
Cash flow statement
A budget deficit results when a person's or family's....
Net worth decreases
Assets exceed liabilities
Actual spending exceeds planned spending
Disposable income equals....
Social security taxes
Gross income
The amount a person or household has to spend
The amount being saved each month
Which of the following is correct?
Entertainment is durable-product goal
Appliances and sporting equitment are intangible-purchase goals
Food and clothing and consumable-product goals
A car purchase is a consumable-product goal
"Tax freedom Day" represents how long the average person works to pay his/her taxes each year
True
False
Cash prizes won on television game shows are subject to both federal and state taxes.
True
False
At the end of the year employees recieve a ______ form that reports annual earnings and the amounts deducted for taxes from their employers.
W-2
W-4
1040
Which of the following goals contain elements for implemtation and measurment?
Spend less each month
Reduce credit card debt
Save $100 a month to create a $2,400 emergency fund in 2yrs
Rule of 72 is:
Used to caculate intrests rates for savings
The number of steps inquired to complete a financial plan
Used to estimate how fast prices will double using a given annual inflation rate
When creating a personal balance sheet, which of the following is a real estate asset?
Cash value of life insurance
Possessions in your home
Vacation Property
Retirment account
Annie was requried to clarify or document minor questions about tax form by mail inquiry. She participated in a:
Detailed audit
Home audit
Correspondence audit
The current financial position of an individual or family is best presented in the form of a...
Balance sheet
Budget
Bank statement
Time value of money support
Which of the following best describes the concept of the time value of money?
Changes to demographic trends in our society
Personal opportunity costs such as time lost on an activity
Increases in amounts of money as a result of intrests earned
Discretionary income equals:
Take-home pay
Gross income
The amount being saved each month
Money left over after paying for housing, food, and other necessities
Attempts to increase income through employment are part of the_________ component of financial planning.
Spending
Planning
Borrowing
Obtaining
Using the following table on question 33 on paper, caculate the taxes for an individual with taxable income of $20,800
$5,175
$6,025.50
$2,298.50
Which of the following intermediate goals is stated most clearly using the SMART approach?
Retire in 10yrs at age 65 with $2,000,000 in my 401(k) account
Purchase a house within the next 5yrs with a mortgage no greater than $150,000
Set up an emergancy fund
Buy a car for less than $15,000 within 6 months
Take-home pay is also called:
Net pay
Monthly savings
Gross income
Deductions
Every decision involves uncertainty, which is reffered to as:
Financial goals
Alternative courses of action
Evaluating Risk
Personal Values
Rebecca Wilson budgeted $1,200 for housing and utilities in July. She actually spent $1,160, what is her budget variance?
$1,160 deficit
$60 deficit
$40 deficit
$40 Surplus
Using the following table on 38, caculate the taxes for an individual with taxable income of $30,000
$850.50
$2,125
$4,500
$3,402.50
How long should you keep your most current will?
Three years
One year
Permanently
Seven years
Income that is not subject to tax is called:
Adjusted gross income
Earned income
Tax-exempt income
Passive income
Fees, tips, and bonuses are forms of:
Earned income
Passive income
Exclusions from income
Tax-exempt income
Which of the following is a cash inflow?
Payment for loan
Purchase of groceries
Payment for medical expenses
Income from employment
The amount you would have left if all assets were sold and all debts were paid in full is called your:
Budgeted expenses
total income
Net assets
Net worth
all of the following are sources of income exept:
Dividends
Salary
Commisions
Social security taxes
If Brenda wants to pay her fair share of taxes, no more and no less, she should practice:
Tax maximization
Tax acceleration
Tax evasion
Tax avoidance
When creating a personal balance sheet, which of the following is a current liability?
Checking Account
Medical Bill
Educational loan
Five year home equity loan
Gross incomr less adjustments to income equals:
Exclusions from income
Earned income
tax-deferred income
Adjusted gross income
A tax due on the purchase of gasoline is called:
Excise Tax
Estate Tax
Inheritance Tax
Income Tax
Which of the following long-term goals is stated most clearly using SMART approach?
Buy a car for less than $15,000 within 6 months
Set up an emergancy fund
Retire in 10yrs at age 65
Invest $50 per month for the next 12yrs for my nephew's college fund
As of 2021, taxpayers can only deduct expenses that are greater than 10% of adjusted gross income for:
Taxes
Contributions to charitable organizations
Medical and dental expenses
Miscellaneous expenses
An IRS agent visited Henry's home to verify some information on his tax return. This visit was called a..
Detailed Audit
Feild Audit
Home Audit
Office Audit
Nancy is married to Jerry and needs to complete her tax form. They both earned about the same amount of money each year. What filing status would be best for them?
Single
Head of Household
Married, filing individually
Married, filing a Joint return
If a $10,000 investment earns interest of $500 in one year, what's the return rate?
75%
10%
5%
100%
Taxes on earnings that fund old age. survivor, and disability insurance benefits are called:
Excise Taxes
Social security Taxes
Estate Taxes
Sales Taxes
Changes in personal, social, and economic factors may require you to....
Develop your financial goals
Determine your current financial situation
Review and revise your financial plan more frequently
Implement your financial action plan
Which of the following is NOT a tax that most people pay?
Federal Taxes on earnings
Local Taxes on property
Federal taxes on possessions
State taxes on purchases
An example of fixed expenses are:
Utilities cost
Recreation expenses
Home Rental payments
Gift expenditures
The number of personal financial records a household has to organize may seem overhwhelming. How long should you keep copies of your tax returns?
Three years
Seven years
Permanently
Until the end of the current year
An example of an excise tax is social security.
True
False
Increased consumer saving and investing is likely to be accompanied by:
Higher inflation
Lower union wages
Lower intrest rates
Higher intrest rates
