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WorksheetsFinancial Literacy Final Exam Review
Total questions: 100
Worksheet time: 50mins
Name
Class
Date
1.
Finance companies take less risk than banks, so they tend to more lenient with borrowers who are late making a payment.
a)
True
b)
False
2.
Income taxes are an example of which type of tax?
a)
progressive
b)
regressive
c)
proportional
d)
excise
3.
Two elements to consider in budgeting and planning are your income and expenses.
a)
True
b)
False
4.
All of the following are danger signs that you are overextending your credit EXCEPT
a)
your credits cards are all near the limit.
b)
you pay your credit card balances in full each month.
c)
you skip some payments in order to make other payments.
d)
you often pay one credit card by using another credit card.
5.
All payroll deductions are required by law.
a)
True
b)
False
6.
A standard workweek is
a)
30 hours.
b)
36 hours.
c)
40 hours.
d)
44 hours.
7.
A credit freeze is a service where a company monitors your credit file and notifies you of changes.
a)
True
b)
False
8.
The total dollar amount of all interest and fees you pay for the use of credit is called the
a)
collateral.
b)
balance due.
c)
principal.
d)
finance charge.
9.
Simple interest is interest computed on the amount borrowed plus compounding.
a)
True
b)
False
10.
Creditors have no responsibilities to consumers/borrowers.
a)
True
b)
False
11.
A person or business that loans money to others is called a(n)
a)
debtor.
b)
debt collector.
c)
cosigner.
d)
creditor.
12.
Secured loans generally have variable interest rates that are higher than other forms of credit.
a)
True
b)
False
13.
You should never sign a contract until you have read and understood it.
a)
True
b)
False
14.
Overtime is not considered when calculating gross pay.
a)
True
b)
False
15.
Before granting credit, a creditor will check your past credit performance.
a)
True
b)
False
16.
Willful failure to pay taxes is called tax
a)
avoidance.
b)
deferral.
c)
brackets.
d)
evasion.
17.
Credit guard companies are offering an important service at a great price that everyone needs.
a)
True
b)
False
18.
Credit reports are issues by
a)
banks.
b)
your employer.
c)
credit bureaus.
d)
credit unions.
19.
If someone steals your identity and opens a credit card in your name, that will not impact your credit score.
a)
True
b)
False
20.
In the United States, individuals pay income taxes and must file income tax returns each year.
a)
True
b)
False
21.
Rate X Hours Worked =
a)
net pay
b)
gross pay
c)
overtime pay
d)
incentive pay
22.
One advantage of computerized record keeping is that information can be updated quickly and easily.
a)
True
b)
False
23.
Self-employed people do not need to pay Social Security or Medicare taxes.
a)
True
b)
False
24.
You must file your tax return by this date each year.
a)
January 31
b)
April 1
c)
April 15
d)
December 31
25.
A legal business that makes high-interest loans based on the value of personal possessions is called a
a)
finance company.
b)
loan shark.
c)
credit union.
d)
pawnbroker.
26.
When an employee is entitled to their full retirement account, the employee is said to be vested.
a)
True
b)
False
27.
On a local level, taxes provide services such as education, parks, roads, and police, fire, and health departments.
a)
True
b)
False
28.
Payments on a credit account includes both principal and interest.
a)
True
b)
False
29.
Which of the following might be included in your credit report?
a)
your marital status
b)
your address
c)
your age
d)
All of these types of information might be included in your credit report.
30.
Money paid for the use of someone else's money is called
a)
interest.
b)
assets.
c)
capital.
d)
dividend.
31.
When one person makes an offer and another person changes it, the second person is
a)
committing fraud.
b)
providing consideration.
c)
entering into an agreement.
d)
making a counteroffer.
32.
The account detail section of a credit report shows the monthly balances of all the consumer's credit accounts.
a)
True
b)
False
33.
When you have insufficient income and assets to pay your debts, you are said to be
a)
liquidated.
b)
indigent.
c)
unsecured.
d)
insolvent.
34.
A work schedule that fits the normal 40-hour workweek into less than five days is called
a)
job sharing.
b)
flextime.
c)
job rotation.
d)
a compressed workweek.
35.
A computer program that organizes data in columns and rows and can perform calculations is called a
a)
database.
b)
scheduler.
c)
spreadsheet.
d)
calculator.
36.
Carrying cash is much more dangerous than carrying a credit card.
a)
True
b)
False
37.
Donna want to buy a new laptop. She finds one for $1000 at Electronic Plus. She withdraws $250 from her checking account at First National Credit Union and obtains a loan from her brother for the rest of the amount. In this scenario, who is the debtor?
a)
Donna
b)
Donna's brother
c)
Electronics Plus
d)
First National Credit Union
38.
Encryption is a scam that uses pop-up messages or email to deceive you into disclosing your personal information.
a)
True
b)
False
39.
Which of the following is a variable expense?
a)
car insurance
b)
rent
c)
entertainment
d)
car loan
40.
An amount subtracted directly from the tax owed is called a tax
a)
exemption.
b)
credit.
c)
deduction.
d)
break.
41.
Donna want to buy a new laptop. She finds one for $1000 at Electronics Plus. She withdraws $250 from her checking account at First National Credit Union and obtains a loan from her brother for the rest of the amount. In this scenario, who is the creditor?
a)
Donna
b)
Donna's brother
c)
Electronics Plus
d)
First National Credit Union
42.
By law, installment contracts must reveal the finance charge and APR.
a)
True
b)
False
43.
Credit purchases almost always cost more than cash purchases.
a)
True
b)
False
44.
This occurs when creditors file a petition with a court asking the court to declare you bankrupt.
a)
repossession
b)
foreclosure
c)
involuntary bankruptcy
d)
voluntary bankruptcy
45.
Only people with considerable wealth need to create a personal record keeping system.
a)
True
b)
False
46.
People who usually pay bills within the grace period, but occasionally make late payments are most likely going to have
a)
excellent credit.
b)
good credit.
c)
fair credit.
d)
poor credit.
47.
Any available public information can become a part of your credit record.
a)
True
b)
False
48.
Do not increase your spending when your income increases; instead, use the extra income to pay off debts or put it into savings.
a)
True
b)
False
49.
You do not need to file a tax return if you are over the age of 65.
a)
True
b)
False
50.
The interest rate that the banks offer to their best business customers is called the
a)
discount rate.
b)
federal funds rate.
c)
commercial rate.
d)
prime rate.
51.
Forms of employee compensation is addition to pay are called benefits.
a)
True
b)
False
52.
If an employee's regular hourly wage is $20.00 per hour, their overtime rate would be
a)
$20.00 per hour
b)
$25.00 per hour
c)
$30.00 per hour
d)
$40.00 per hour
53.
In a flexible scheduling arrangement, the core time period is
a)
the time of day when employees get their daily assignments.
b)
the starting time for most employees.
c)
the schedule requested most often by employees.
d)
a crucial time of day when all employees must be working.
54.
By law, only professional tax preparers may use tax preparation software or file a tax return electronically.
a)
True
b)
False
55.
Employers must contribute matching amounts into each employee's Medicare and Social Security accounts.
a)
True
b)
False
56.
A state law that sets the maximum interest rate that may be charged for consumer loans is called a
a)
consumer credit law.
b)
debt collection law.
c)
usury law.
d)
garnishment law.
57.
In the United States, the responsibility of filing a tax return rest with the individual. This defines the concept of
a)
pay-as-you-go.
b)
voluntary compliance.
c)
the graduated income tax system.
d)
the ability-to-pay principle.
58.
Self-employed people must make estimated tax payments
a)
daily.
b)
monthly.
c)
quarterly.
d)
yearly.
59.
The largest source of government revenue in the United States is
a)
Social Security taxes.
b)
excise taxes.
c)
tariffs.
d)
income taxes.
60.
In the United States, paying state and Federal income taxes is optional.
a)
True
b)
False
61.
Credit bureaus gather information from businesses that pay a monthly fee to the credit bureaus. These businesses are called
a)
consumers.
b)
subscribers.
c)
debtors.
d)
brokerage firms.
62.
A record of your debts and a strategy for paying them off is called a budget.
a)
True
b)
False
63.
Which of the following in NOT an example of a creditors' responsibility to a consumer?
a)
honestly represent goods and services
b)
setting reasonable guidelines for credit use
c)
calling the consumer each month to verify that the bill is correct
d)
making credit records available to consumers
64.
A scam that uses online pop-up messages or email to deceive you into disclosing personal information is called
a)
philtering.
b)
encryption.
c)
phattening.
d)
phishing.
65.
Cash is the most commonly used method of purchase in the United States.
a)
True
b)
False
66.
One way to minimize the cost of credit is to
a)
apply for more credit that you need.
b)
make less than the minimum monthly payments.
c)
pay cash for small purchases.
d)
carry at least five credit cards.
67.
An examination of a tax return is called a(n)
a)
IRS review.
b)
audit.
c)
tax check.
d)
tax deduction.
68.
A timeframe within which you may pay your current credit balance in full and incur no interest or finance charge is called a grace period.
a)
True
b)
False
69.
A service available to charge customers whereby purchases are not billed until much later than the standard billing time is called
a)
a leveraged payment plan.
b)
a secured loan.
c)
deferred billing.
d)
a grace period.
70.
The IRS has the legal right to randomly audit your tax returns for
a)
1 year.
b)
2 years.
c)
3 years.
d)
5 years.
71.
Everyone who applies for a loan will receive a loan.
a)
True
b)
False
72.
When you buy an item that serves as collateral, you are taking out a(n)
a)
unsecured loan.
b)
secured loan.
c)
conditional loan.
d)
microloan.
73.
A responsible attitude toward honoring your obligations is called
a)
capacity.
b)
collateral.
c)
conditions.
d)
character.
74.
In this kind of audit, the IRS requires you come to an in-person meeting with an IRS auditor to answer questions about a tax return.
a)
office audit
b)
correspondence audit
c)
field audit
d)
document audit
75.
A type of work schedule that allows employees to choose their working hours within defined limits is called
a)
flextime.
b)
a compressed workweek.
c)
telecommuting.
d)
job rotation.
76.
The agreement to pay debts that have been legally discharged is called
a)
bankruptcy.
b)
garnishment.
c)
reaffirmation.
d)
debt collection.
77.
Generally, accounts with the lowest interest rates should be your first priority in a credit payment plan.
a)
True
b)
False
78.
A spending and savings plan based on your expected income and expenses is called a(n)
a)
credit payment plan.
b)
financial plan.
c)
budget.
d)
down payment.
79.
Assets minus liabilities equals
a)
creditworthiness.
b)
market value.
c)
net worth.
d)
profit.
80.
If you hire a professional tax preparer, it guarantees that you won't be audited.
a)
True
b)
False
81.
A legal process that relieves debtors of the responsibility of paying their debts or protects them while they pay is called
a)
debt consolidation.
b)
bankruptcy.
c)
reaffirmation.
d)
discharged debt.
82.
Property pledged to assure repayment of a loan is called
a)
collateral.
b)
consideration.
c)
capacity.
d)
a down payment.
83.
A written statement of a consumer's credit history is called a(n)
a)
contract.
b)
collateral report.
c)
credit report.
d)
credit payment plan.
84.
A group of people who work in the same or similar occupations, organized for the benefit of all employees in these organizations is called a(n)
a)
credit union.
b)
professional cooperative.
c)
employment club.
d)
labor union.
85.
The competence or legal ability of a person to enter a contract is called consideration.
a)
True
b)
False
86.
The process of negotiating a work contract for union members is called collective bargaining.
a)
True
b)
False
87.
Tax rates apply to different income ranges, or tax
a)
groups.
b)
brackets.
c)
braces.
d)
levels.
88.
A determination that you are a good credit risk is called
a)
an audit.
b)
creditworthiness.
c)
a budget.
d)
consideration.
89.
A legal process that allows part of your paycheck to be withheld for payment of a debt is called
a)
budgeting.
b)
collateral.
c)
garnishment.
d)
reaffirmation.
90.
Part of a purchase price that must be paid up front in cash is called a down payment.
a)
True
b)
False
91.
Buying something without thinking about it is called comparison shopping.
a)
True
b)
False
92.
Someone who promises to pay if the borrower fails to repay is called the
a)
creditor.
b)
cosigner.
c)
debt collector.
d)
loan shark.
93.
A legally enforceable agreement between two of more people is called a contract.
a)
True
b)
False
94.
Time worked beyond the regular hours is called
a)
flextime.
b)
incentive time.
c)
overtime.
d)
extra time.
95.
Which of the following would be considered an asset?
a)
a credit card
b)
a piece of jewelry.
c)
a car loan
d)
All of these are assets.
96.
Something of value exchanged for something else of value is called
a)
credit.
b)
interest.
c)
consideration.
d)
capital.
97.
A responsible attitude toward honoring obligations is called
a)
capacity.
b)
collateral.
c)
conditions.
d)
character.
98.
When assets are greater than liabilities, you are said to be solvent.
a)
True
b)
False
99.
A person of company hired by a creditor to collect the overdue balance on an account is called a(n)
a)
debtor.
b)
creditor.
c)
debt collector.
d)
credit officer.
100.
The financial ability to repay a loan with present income is known as
a)
consideration.
b)
character.
c)
capacity.
d)
cash flow.
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