Question 1

Your big screen HDTV would be listed as an asset on your personal balance sheet.However,the loan you took out to buy the TV would be listed as a personal liability.

Accepted Answer

A) True 
 B)False

Question 2

The earnings of a traditional individual retirement account IRA) are:

Accepted Answer

A)  taxed at the time they are earned.
B)  not taxed.
C)  taxed when the funds are withdrawn.
D)  subject to the double taxation of all dividends.E) A) and B)
F) All of the above

Question 3

The three factors that have the greatest influence on how the value of your home increases over time are: 1)size square feet),2)age,and 3)design features.

Accepted Answer

A) True 
 B)False

Question 4

Managing the finances of a household is similar to managing the finances of a small business.

Accepted Answer

A) True 
 B)False  True

Question 5

The money a worker invests in a 401k)retirement account reduces that worker's present taxable income.

Accepted Answer

A) True 
 B)False

Question 6

The key to generating enough capital for investment for many individuals is to:

Accepted Answer

A)  obtain as many credit cards as possible in order to maximize spending power.
B)  live frugally.
C)  borrow money from friends and family.
D)  buy only high quality consumer goods.E) B) and C)
F) C) and D)

Question 7

Which of the following accounting statements would assist an individual in taking inventory of personal assets and liabilities?

Accepted Answer

A)  income statement
B)  balance sheet
C)  budget
D)  statement of cash flowsE) None of the above
F) All of the above

Question 8

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Accepted Answer

A)  credit cards are no longer accepted in many places as a valid source of credit.
B)  credit cards require that at least 25% of the balance be paid each month.
C)  there will be a finance charge even if Hannah pays her entire credit card balance in full and on time.
D)  the convenience of credit cards can lead to excessive debts.E) None of the above
F) A) and C)

Question 9

In saving for retirement,Penny could take advantage of the unique tax shelter offered only to small-business owners in a:

Accepted Answer

A)  401k) plan.
B)  simple IRA plan.
C)  Roth plan.
D)  Keogh plan.E) A) and B)
F) C) and D) D

Question 10

Roberto has just opened a 401k)retirement plan.The money he invests in this plan will reduce Roberto's present taxable income.

Accepted Answer

A) True 
 B)False

Question 11

Most people find it relatively easy to live frugally.

Accepted Answer

A) True 
 B)False

Question 12

Regardless of potential changes,you can count on Social Security to provide you with a comfortable retirement.

Accepted Answer

A) True 
 B)False

Question 13

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

Accepted Answer

A) True 
 B)False

Question 14

The people who assist families in developing a comprehensive program that covers investments,taxes,insurance,and retirement plans are called:

Accepted Answer

A)  insurance salespeople.
B)  financial planners.
C)  portfolio managers.
D)  stockbrokers.E) B) and C)
F) A) and D) B

Question 15

When you prepare your personal balance sheet,remember that your ________ is equal to your total assets minus any liabilities you have.

Accepted Answer

A)  net income
B)  net worth
C)  tax base
D)  cash equivalent valueE) A) and D)
F) A) and B)

Question 16

The tax-deferred investment plan that allows employees to save part of their income for retirement is called an) :

Accepted Answer

A)  60/40 plan.
B)  individual retirement account.
C)  704i) plan.
D)  Keogh plan.E) A) and B)
F) A) and C)

Question 17

One step toward the goal of taking control of your finances is to keep track of all your expenses.

Accepted Answer

A) True 
 B)False

Question 18

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Accepted Answer

A) True 
 B)False

Question 19

Describe the major steps involved in estate planning.

Accepted Answer

For people with young children,the first...

Question 20

The first step you would take to get control of your personal finances is to:

Accepted Answer

A)  keep track of all your expenses.
B)  prepare a budget.
C)  take inventory of your assets.
D)  start a savings program.E) B) and C)
F) C) and D)

Exam 25: Managing Personal Finances

Your big screen HDTV would be listed as an asset on your personal balance sheet.However,the loan you took out to buy the TV would be listed as a personal liability.

Correct AnswerverifiedShow Answer

The earnings of a traditional individual retirement account IRA) are:

Correct AnswerverifiedShow Answer

The three factors that have the greatest influence on how the value of your home increases over time are: 1)size square feet),2)age,and 3)design features.

Correct AnswerverifiedShow Answer

Managing the finances of a household is similar to managing the finances of a small business.

Correct AnswerverifiedTrue

The money a worker invests in a 401k)retirement account reduces that worker's present taxable income.

Correct AnswerverifiedShow Answer

The key to generating enough capital for investment for many individuals is to:

Correct AnswerverifiedShow Answer

Which of the following accounting statements would assist an individual in taking inventory of personal assets and liabilities?

Correct AnswerverifiedShow Answer

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Correct AnswerverifiedShow Answer

In saving for retirement,Penny could take advantage of the unique tax shelter offered only to small-business owners in a:

Correct AnswerverifiedD

Roberto has just opened a 401k)retirement plan.The money he invests in this plan will reduce Roberto's present taxable income.

Correct AnswerverifiedShow Answer

Most people find it relatively easy to live frugally.

Correct AnswerverifiedShow Answer

Regardless of potential changes,you can count on Social Security to provide you with a comfortable retirement.

Correct AnswerverifiedShow Answer

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

Correct AnswerverifiedShow Answer

The people who assist families in developing a comprehensive program that covers investments,taxes,insurance,and retirement plans are called:

Correct AnswerverifiedB

When you prepare your personal balance sheet,remember that your ________ is equal to your total assets minus any liabilities you have.

Correct AnswerverifiedShow Answer

The tax-deferred investment plan that allows employees to save part of their income for retirement is called an) :

Correct AnswerverifiedShow Answer

One step toward the goal of taking control of your finances is to keep track of all your expenses.

Correct AnswerverifiedShow Answer

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Correct AnswerverifiedShow Answer

Describe the major steps involved in estate planning.

Correct AnswerverifiedFor people with young children,the first...View AnswerShow Answer

The first step you would take to get control of your personal finances is to:

Correct AnswerverifiedShow Answer

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True

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D

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B

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For people with young children,the first...
View Answer

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