WorksheetsTheme 2 Test Prep
Total questions: 20
Worksheet time: 10mins
To balance a budget, it is important that?
income exceeds expenses.
expenses exceed income.
income equals expenses.
expenses are minimized.
Which of the following is NOT a method of payment using a checking account?
debit card
wire transfer
credit card
check
How is a person's net worth determined?
It is their total assets combined with the amount in their bank accounts, minus debts.
It is the total income earned over a lifetime.
It is the value of their investments only.
It is the sum of their monthly expenses.
Adding a fixed amount to your savings each month to have in case of emergency or to save for the future is called?
paying yourself first
budgeting
investing
saving for retirement
Why are higher-interest checking and savings accounts preferable?
They speed up your rate of return.
They have lower fees than traditional accounts.
They offer more ATM locations.
They require a higher minimum balance.
What is the NMI used for?
It is the amount of income used to determine your monthly spending budget.
It is a measure of a company's net income after taxes.
It refers to the total income generated from investments.
It is a financial term for net market income.
Which of the following is NOT a method used by careful consumers?
buying a random item that is offered on special discount—today only
researching products before making a purchase
comparing prices from different retailers
creating a shopping list before going to the store
The Rule of 72 is a method to determine?
the time it will take an amount to double in value.
the interest rate needed to triple an investment.
the total amount of interest earned over a year.
the best investment strategy for retirement.
Which of the following would be considered a short-term savings goal?
paying to attend the regional championships
saving for a house down payment
building a retirement fund
investing in the stock market
What is an advantage of being a careful consumer?
making the most of your money
spending more on unnecessary items
ignoring product reviews
buying the cheapest option available
What is the first step in budgeting?
examining cash flow
setting financial goals
calculating expenses
reviewing past budgets
What is the amount of income remaining after all bills and obligations are paid that can be used to purchase wanted goods and services?
discretionary income
net income
gross income
passive income
The root cause for a student spending more than she has is that she?
does not keep track of her spending.
has too many subscriptions.
frequently eats out with friends.
does not have a budget plan.
Sasha needs a bank that is open 24/7 and accessible overseas. Which bank should she choose?
local bank
internet bank
credit union
community bank
What is the purpose of a transaction register?
To track all financial transactions
To provide a summary of account balances
To ensure accurate record-keeping
all of the above
What is NOT an effect of long-term overspending?
Impulse buying occurs on a regular basis.
Increased financial stress and anxiety.
Accumulation of debt and financial obligations.
Decreased ability to save for future goals.
Spending money on items that are seen as trendy or expensive can project a certain image but?
can lead to unwanted debt.
is always a good investment.
will guarantee happiness.
is a sign of success.
Which of the following shows negative cash flow?
gross income $1,332.00; expenses $1,554.00
gross income $2,000.00; expenses $1,500.00
gross income $1,800.00; expenses $1,800.00
gross income $1,500.00; expenses $1,200.00
What is the main difference between a bank and a credit union?
Banks are owned by shareholders; credit unions are owned by members.
Banks offer higher interest rates on savings; credit unions offer lower rates on loans.
Banks exist to make a profit; credit unions re-invest profit to benefit members.
Banks provide services only to individuals; credit unions provide services only to businesses.
If $500.00 is placed in a savings account paying 10 percent per year compounded annually, what will the account balance be at the end of the year?
$500.00
$525.00
$550.00
$575.00
