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manging your money unit mulitply
Terms in this set (29)
A key difference between commercial banks and credit unions is that:
Commercial banks are 'for‐profit' and credit unions are 'not‐for‐profit'
Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method of saving because she can have immediate access to the money if she needs it. Recently, in a class at school, discussion focused on why depository institutions are safer than her piggy bank. Some students' comments were based on fact while others were based on myths. Which aspect of security at a depository institution is NOT TRUE?
Depository institutions have insurance protection. Depositors can have multiple accounts insured at the same depository institution as long as each account has no more than $100,000.
Sanjay is concerned about the safety of the money in his savings account. Which type of depository institution should he choose?
He could safely choose either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements.
Ariel is saving money to purchase a new computer before she leaves for college in two years. She wants to open a special account at a depository institution to keep her saved money safe. She has asked you for advice on which type of account would be best for her. What would be the best advice for Ariel?
Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer.
5. Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest?
When earning interest, look for low rates.
Samantha wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do?
Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent is immediately deducted from her account.
Common fees that may be charged by a depository institution include all EXCEPT:
David made a mistake in his checking account record keeping and spent $10 more than he had deposited in his account. As a result, he can expect to be charged a(n):
Which statement is TRUE about Payroll Taxes?
Payroll taxes fund the Social Security and Medicare programs.
10. As Mariah was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag showed for the item. What is this extra 6% charge most likely to be?
Sales tax on the shirt she purchased.
Who is Medicare designed to help?
Dane is researching the topic of property taxes for a presentation he is doing in his Personal Finance class. He has come across the following statements he is considering adding to his presentation. Which should he EXCLUDE from his presentation because it is not correct?
Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use.
Which statement is NOT TRUE about property taxes?
The property tax rate is set by the federal government to be equal in every state.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called _____________ taxes.
15. Austin has just received his first paycheck. He worked 22 hours at his new job and is being paid $8.00 per hour. He calculated that his paycheck should be $176. His paycheck amount is almost 1/3 less than he expected. What is the most likely reason that Austin's pay is less than he expected it to be?
Austin neglected to deduct the amount required to pay income and payroll taxes.
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?
Money in the paycheck he will receive next week
To calculate her net worth Jordyn should use the following formula:
Assets - liabilities = net worth
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?
Maggie, because her income minus her net worth is a smaller amount than Samantha's.
Jonah is writing down his liabilities to complete his Statement of Financial Position. The item he should include would be:
The balance on his credit card
To increase his net worth, Jackson could:
Increase his assets
21. Erin and her mother are putting together an Income and Expense Statement for Erin to use as she applies for a college scholarship. Which income source does she NOT need to include for this statement?
Taxes she paid based on her income last year.
Which of the following would most likely be considered a contractual expense?
23. Andy is developing an Income and Expense Statement. He has gathered all his receipts, bank statements, paycheck stubs, and spending records. He needs to categorize them into income and expenses. He is unsure which of the following items should be recorded as expenses. Which should be recorded as expenses?
Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
24. 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?
Amanda and March are earning more money than they are spending. They could place additional money in savings and/or spend it on other expenses.
25. If expenses were to exceed income on a spending plan, what would be a financially smart solution?
Diana and Aaron have decided to develop a spending plan to help them gain control over their finances. Which of the following statements is NOT TRUE about spending plans?
A spending plan includes items NOT usually included when creating a budget.
When is your spending plan complete?
Spending plans are always under revision so they are never complete.
Chase has decided to work with a spending plan so he can build up an emergency fund for when he is in college. He learned in class that he could probably reduce his spending the most by looking at his non‐contractual expenses. Which of his expenses best fit that category?
Gasoline, food, and entertainment
Michael wants to develop a spending plan for himself to use during his final year of high school. What will he need to do as his FIRST step?
Track his current income and expenses. If he has already created an Income and Expense Statement then he has completed this step.
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