Question 1

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) A) and D)
F) B) and C)

Question 2

IRAs,401(k),and Keogh plans all include incentives to encourage saving for retirement.

Accepted Answer

A) True 
 B)False

Question 3

One benefit of a simple IRA is that it allows:

Accepted Answer

A)   employees of small companies to save more than a regular IRA.
B)   employees to invest in the corporate bonds of their employers.
C)   business owners to use employee retirement funds to help finance their small business.
D)   employees to withdraw funds from the IRA prior to retirement without penalty.E) B) and D)
F) B) and C)

Question 4

Ima Safer,who recently graduated from college and got a full time job,has prepared her first personal budget and found a pleasant surprise.After taking into account her expected monthly income and all of her ordinary expenses,including the monthly payment on her credit card,she should have some money left over.If Ima is like most young people who are just starting out,the best thing for her to do with the extra money would be to:

Accepted Answer

A)   use it to open her own business.
B)   pay off any charges against her credit card account or other high interest debts.
C)   use it to make a down payment on a house.
D)   put it into a savings account that earns a guaranteed rate of return.E) A) and B)
F) A) and C)

Question 5

Large corporations with at least 500 employees can offer their employees a simple 401(k)retirement plan that allows for greater contribution maximums.

Accepted Answer

A) True 
 B)False

Question 6

People who have health insurance seldom need disability insurance.

Accepted Answer

A) True 
 B)False

Question 7

Given a 25% tax bracket,the after-tax cost of a house mortgage interest payment of $1,000 would be:

Accepted Answer

A)   $250.
B)   $750.
C)   $1,000.
D)   $1,250.E) B) and D)
F) B) and C)

Question 8

An IRA (individual retirement account)is a tax-deferred investment plan that encourages workers to save for retirement.

Accepted Answer

A) True 
 B)False

Question 9

The best way to save money is to:

Accepted Answer

A)   pay yourself first by taking out money for savings from each paycheck before deciding what to do with the remaining money.
B)   start your own business designed to create business tax deductions.
C)   prepare a balance sheet.
D)   pay yourself last.E) All of the above
F) None of the above

Question 10

A Roth IRA offers employees an incentive to save for their retirement by:

Accepted Answer

A)   deferring taxes on income contributed to the IRA.
B)   eliminating taxes on the withdrawals from the IRA.
C)   eliminating taxes on the income contributed to the IRA.
D)   allowing employers to match the employee's contribution to the IRA.E) A) and D)
F) All of the above

Question 11

One drawback to buying a home compared to renting is that your monthly mortgage payments will increase,while rental payments are fixed.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a benefit unique to buying a duplex,as opposed to the purchase of a single-family home?

Accepted Answer

A)   Real estate taxes are tax deductible.
B)   The rent income will help make the mortgage payment.
C)   Mortgage interest payments are tax deductible.
D)   The value of the home may increase over time.E) A) and C)
F) B) and C)

Question 13

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) All of the above
F) A) and B)

Question 14

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Accepted Answer

A) True 
 B)False

Question 15

Lucy has prepared her personal balance sheet and found that her total assets are $54,000 and her total liabilities (largely college loans) are $48,000.This indicates that Lucy's:

Accepted Answer

A)   net income is only $6,000.
B)   net worth is $6,000.
C)   cash flow will not be sufficient to repay her college loans.
D)   balance sheet is out of balance.E) All of the above
F) A) and B)

Question 16

A benefit of using credit cards is that they:

Accepted Answer

A)   have lower interest rates than other forms of credit.
B)   provide a record that makes it possible to keep track of purchases easily.
C)   help consumers be more disciplined when it comes to spending decisions.
D)   allow the consumer to spread out payments and reduce overall costs.E) A) and D)
F) A) and C)

Question 17

One strategy used to lower car insurance premiums is to choose a policy with a large deductible.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an indication that the government has recognized that problems with Social Security funding make it highly unlikely that future Social Security benefits will be sufficient to provide retirees with enough income for a comfortable retirement?

Accepted Answer

A)   The government has provided cost-of-living adjustments to Social Security recipients.
B)   The government has invested the contributions in high-yielding investment securities.
C)   The government has established incentives for workers to save their own money for retirement.
D)   The government has passed legislation to require Social Security to maintain a balanced budget.E) A) and B)
F) None of the above

Question 19

A good way to save money is to spend all of your regular income,but have a strict rule to put any money from unexpected or unusual sources (such as overtime pay,bonuses,gifts,gambling payouts,or contest prizes)into a savings account.

Accepted Answer

A) True 
 B)False

Question 20

Both the Roth and traditional IRA allow individuals to put as much money as they want into their retirement account.

Accepted Answer

A) True 
 B)False

Exam 22: Appendix B: Managing Risk

Large corporations with at least 500 employees can offer their employees a simple 401(k)retirement plan that allows for greater contribution maximums.

Correct Answer
verified

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

Correct Answer
verified

Which of the following is an indication that the government has recognized that problems with Social Security funding make it highly unlikely that future Social Security benefits will be sufficient to provide retirees with enough income for a comfortable retirement?

Correct Answer
verified

Given a 25% tax bracket,the after-tax cost of a house mortgage interest payment of $1,000 would be:

Correct Answer
verified

One strategy used to lower car insurance premiums is to choose a policy with a large deductible.

Correct Answer
verified

One benefit of a simple IRA is that it allows:

Correct Answer
verified

Which of the following is a benefit unique to buying a duplex,as opposed to the purchase of a single-family home?

Correct Answer
verified

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Correct Answer
verified

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

Correct Answer
verified

Both the Roth and traditional IRA allow individuals to put as much money as they want into their retirement account.

Correct Answer
verified

An IRA (individual retirement account)is a tax-deferred investment plan that encourages workers to save for retirement.

Correct Answer
verified

A good way to save money is to spend all of your regular income,but have a strict rule to put any money from unexpected or unusual sources (such as overtime pay,bonuses,gifts,gambling payouts,or contest prizes)into a savings account.

Correct Answer
verified

A Roth IRA offers employees an incentive to save for their retirement by:

Correct Answer
verified

Correct Answer
verified

Lucy has prepared her personal balance sheet and found that her total assets are $54,000 and her total liabilities (largely college loans) are $48,000.This indicates that Lucy's:

Correct Answer
verified

A benefit of using credit cards is that they:

Correct Answer
verified

People who have health insurance seldom need disability insurance.

Correct Answer
verified

The best way to save money is to:

Correct Answer
verified

One drawback to buying a home compared to renting is that your monthly mortgage payments will increase,while rental payments are fixed.

Correct Answer
verified

IRAs,401(k),and Keogh plans all include incentives to encourage saving for retirement.

Correct Answer
verified

Exam 22: Appendix B: Managing Risk

Large corporations with at least 500 employees can offer their employees a simple 401(k)retirement plan that allows for greater contribution maximums.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an indication that the government has recognized that problems with Social Security funding make it highly unlikely that future Social Security benefits will be sufficient to provide retirees with enough income for a comfortable retirement?

Correct AnswerverifiedShow Answer

Given a 25% tax bracket,the after-tax cost of a house mortgage interest payment of $1,000 would be:

Correct AnswerverifiedShow Answer

One strategy used to lower car insurance premiums is to choose a policy with a large deductible.

Correct AnswerverifiedShow Answer

One benefit of a simple IRA is that it allows:

Correct AnswerverifiedShow Answer

Which of the following is a benefit unique to buying a duplex,as opposed to the purchase of a single-family home?

Correct AnswerverifiedShow Answer

An umbrella policy is an inexpensive policy that provides financial protection only in the event of clearly defined major catastrophes such as hurricanes or earthquakes-events which are referred to in the insurance industry as "rainy days."

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Both the Roth and traditional IRA allow individuals to put as much money as they want into their retirement account.

Correct AnswerverifiedShow Answer

An IRA (individual retirement account)is a tax-deferred investment plan that encourages workers to save for retirement.

Correct AnswerverifiedShow Answer

A good way to save money is to spend all of your regular income,but have a strict rule to put any money from unexpected or unusual sources (such as overtime pay,bonuses,gifts,gambling payouts,or contest prizes)into a savings account.

Correct AnswerverifiedShow Answer

A Roth IRA offers employees an incentive to save for their retirement by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lucy has prepared her personal balance sheet and found that her total assets are $54,000 and her total liabilities (largely college loans) are $48,000.This indicates that Lucy's:

Correct AnswerverifiedShow Answer

A benefit of using credit cards is that they:

Correct AnswerverifiedShow Answer

People who have health insurance seldom need disability insurance.

Correct AnswerverifiedShow Answer

The best way to save money is to:

Correct AnswerverifiedShow Answer

One drawback to buying a home compared to renting is that your monthly mortgage payments will increase,while rental payments are fixed.

Correct AnswerverifiedShow Answer

IRAs,401(k),and Keogh plans all include incentives to encourage saving for retirement.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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