FICA taxes include two components, which consist of. Which of the following gross income is not taxable income? Which of the following is not a true statement about mutual funds? What are the main purposes of personal financial statements? Cash flows are affected by financial planning decisions. Which of the following will not increase your liquidity ratio? a. Study 32 Personal Financial Management Exam 1 flashcards from Hannah C. on StudyBlue. How does tax-exempt income differ from tax-deferred income? Nancy also has student loans on which she makes monthly payments of $200. Which of the following it not an annuity? Study Flashcards On Personal Finance Exam 2 at Cram.com. Tired of Keeping Up with the Joneses? 1. storing and maintaining financial records and documents. Interest earned on municipal bonds b. Taxpayers who are blind get the benefit of, When taxable income exceeds certain levels, the itemized deductions and exemptions, Legal methods of reducing your taxes include all of the following except. The higher the rate used in determining the future value of an annuity. Activity: What Is Personal Finance? PLAY. Which of the following statements is not true regarding education and financial position? Insurance planning is not designed to protect your wealth in which of the following ways? chapter 3: taxes in your financial plans ; chapter 2: using financial statements; exam_1 (quizzes and terms for ch 1,2,3,4,6) chapter 4: the role of cash management in personal financial planning; chapter 2: using financial statements and budgets LIST THE SIZ COMPONENTS OF A FINANCIAL PLAN. 1. handline daily business activities such as paying bills. Jessie has $4,000 in a bank account, $2,800 in a 401(k) plan at work, a car with a current value of $28,000, and a house that she purchased for $92,000 that has a current value of $118,000. Start studying Personal Financial Planning (Exam 1). Personal Financial Planning at ORU, Prof. Rinne Martin. Margaret's liquidity ratio is, Nancy has $40,000 of annual disposable income and saves $8,000 a year. Everything else being equal, the ________ the interest rate, the ________ the final accumulation of money. what are three major money management activities? What are some suggested methods to make saving easy? A person's net worth would increase as a result of, The net worth of an individual or family can be increased by, The best measure of a person's or family's wealth is, If your cash outflows are $600 and your cash inflows are $1,000, you can increase your net worth by. Which of the following is not one of these special adjustments? Which of the following items is not impacted by the taxpayer's income level? The concept of time value of money is important to financial decision making because. What is the difference between your marginal tax rate and your average tax rate? Which of the following actions will not increase your net worth? Learn vocabulary, terms, and more with flashcards, games, and other study tools. If Bill wants to increase his savings rate by 2% and he currently saves $6,750, how much additional savings will Bill need to contribute to achieve his savings goal of 11%? Which of the following statements about stocks is not true? What is he solving for using his financial calculator? personal- age, magital status, number and age of household members, employment situation. For the following tax situations, indicate if this item refers to tax-exempt income or tax-deferred income. He supports his father who is 90 years old, blind, and has no income. what relationship exists among personal financial statements, budgeting, and achieving personal financial goals? avoidance- involved the use of legitimate methods to reduce an individuals taxes. Personal Financial planning quiz on credit and basics of financial planning More Financial Management Quizzes Financial Management Quiz: Objectives And Functions! If spending exceeds the amount of your income over a period of time, your best option is probably to. savings, payment services, borrowing, other financial services (insurance protections, investments, loans). Paying off a credit card with cash will have which of the following effects on net worth? Which of the following is not correct? Many individuals tend to ________ their cash inflows and ________ their outflows. Which of the following tables should she use? A budget will not do which of the following? The concept of time value of money is based on. The wages that you forego when you leave work early to attend class is an example of a(n) ________. Which of the following tables should he use? balance sheet and cashflow statement provide info about your current financial situation. Gravity. She also has the following monthly expenses: Rent, $750; student loan payment, $200; utilities, $150; food, $300; recreation, $600; car expenses, $200; clothing, $150. What are examples of deposit-type financial institutions? Allison expects her monthly cash inflow after taxes to be $3000. Which of the following is not a step in developing a financial plan? High School Course. What was the total impact on Jakob's cash flow for the year? If Jo Ann had $4,000 in liquid assets and $1,000 in current liabilities, she would have a liquidity ratio of. If Lynn and Robert file a joint return, how many exemptions may they claim? Which of the following decisions would involve the use of the future value of $1? inheritance tax- A tax levied on the value of property bequeathed by a deceased person, payed for the right to acquire the inherited property. Jim has $1,000 income from his job and $200 stock dividend income this month. If you are a married taxpayer, you may use the ________ filing status. This is true because. actual cash value is where the insured person receives compensation based on the current cost of damage or lost item, 5 factors affect home owners insurance cost, 1. bodily injury liability insurance for an accident you were not responsible for, Automotive liability coverage is usually expressed by three numbers. Michael's brother, Thomas, lives with Michael in his own home. If you take money out of your savings account to pay off a credit card your liquidity ratio will, If you sell stock from your portfolio to pay off your car loan, your debt ratio of 0.5 will, Margaret has $5,000 in her checking account, a home with a market value of $175,000, and stocks valued at $10,000. ________ management involves decisions regarding how much credit you need to support spending and which sources of credit to use. Personal Financial Goals. If your net cash inflows exceed your net cash outflows, you can increase your net worth by investing the difference in more ________. During his ________ your Uncle Harvey decides to cut you out of his will. Which one of the following is a liquid asset? Start studying Personal Finance Planning Unit 1 Lesson 2. View Test Prep - Personal Finance Test Bank Chapter 1-6 from FINANCE 401 at Bloomsburg University. Her savings rate is, If you save the same dollar amount from each paycheck during your career as your income increases, your savings rate will. compounding as it applies to a lump sum or single money amount, compounding as it applies to periodic deposits--stream of equal payments that are recieved/paid at equal intervals in time. The Personal Financial Planning project requires all but the following item: A. Jennifer has assets of $100,000 and $10,000 of debt. If you are interested in achieving a long-term savings goal, then. The time value of money can be applied to all of the following except. Which of the following is not an acceptable method of reducing your tax bill? Sandy wants to know how much she needs to save today to have $5,000 in five years at a 7% interest rate. Your net worth will not be increased by which of the following actions? Which of the following decisions would involve the use of the present value of a $1 ordinary annuity table? Cash inflows tend to be the highest in which of the following? Future and present values are dependent upon all of the following except, If you are presented with an offer to accept payment now or a greater amount in the future, you would use (assuming you can invest the money at a known rate), As the time period until receipt increases, the present value of an amount at a fixed interest rate. 50- insurance will pay up to $50,000 for each person injured in an accident. A personal financial plan involves decisions about financial goals and describes the spending, financing, and investing plans necessary to achieve those goals. Yogi Berra Jr. has agreed to play for the New York Mets for $4 million per year for the next 10 years. If you own stock that has increased in price, it would be best to sell it after you have owned it for at least. If you have current assets of $20,000 and current liabilities of $10,000, then you. The tax method that uses the principle of taxing those more who earn more is called ________ taxation. George is 65 years old. Cash flows are affected by financial planning decisions. Which of the following would be classified as a short-term goal? STUDY. If he has a 15% marginal tax rate and the contribution is tax deductible, Jake will, For qualified individuals, a contribution to a traditional IRA (Individual Retirement Account) is a(n), Reductions of gross income for such items as individual retirement accounts (IRAs), moving expenses, and student loan interest payments will result in, The standard deduction (assuming you are not over 65 or blind) is largest for, The filing status that yields the largest standard deduction per taxpayer is. Susie wants to know how much she needs to save today to have $5,000 in five years. What is Jessie's current net worth? What are the four major categories of taxes, Estate- A tax imposed on the value of a person's property at the time of death. The income in your budget is not affected by. Which of the following is correct? The state lottery has just informed you that you have won $1 million to be paid out in the amount of $50,000 per year for the next 20 years. Darlene Elkin has the following financial amounts: checking accounts $850, savings account $3,500, credit card balance $300, jewelry $1,600, real estate valued at $78,000, and a mortgage on the real estate of $23,000. The course begins at 5 p.m. and goes until 9 p.m. on Monday nights. Which of the following can be deducted from your taxes even if you do not itemize? If your income exceeds the amount you spend, you should ________ your investments or ________ loans. The increased mortgage payment was in effect the remainder of the year. ________ allows access to funds to cover any short-term cash deficiencies. Aaron wants to put $200 per month into an IRA account at 15% for four years. Personal financial management is important because it a. controls inflation b. lessens economic differences among individuals c. uses money as an end d. makes personal financial goals easier to achieve ANS: D 2. What actions might a person take to identify alternatives when making a financial decision? several tax online software's and human tax preppers, IRS also distributes publications, recorded messages, and walk in assistance for people who do their own taxes. it consists of assets - liabilities = net worth. The highest tax rate a taxpayer is charged on his or her federal tax return is called the ________ rate. Jake invested $800 in an IRA. Nancy is considering the purchase of a new car, but also is very determined to save at least 50% of any budget surplus each month. By establishing high and unrealistic financial goals, you will probably, Goals with a time frame of between one and five years are classified as. PLAY. To qualify for "head of household" you must, If you are a surviving spouse, you may continue to use the married filing jointly tax rates unless. The budgeting process consists of seven steps: (1) set financial goals; (2) estimate income; (3) budget an emergency fund and savings; (4) budget fixed expenses; (5) budget variable expenses; (6) record spending amounts; and (7) review spending and saving patterns. Gross income and adjusted gross income can be the same if you do not have any special adjustments. How does the money market account differ from a money market fund? In addition he baby-sits three other children in the evenings and has a cat and two dogs. The average tax rate is calculated by taxes paid/income earned. Your ability to access funds to cover any short-term cash deficiencies is your ________. Quickly memorize the terms, phrases and much more. A college student who, because of ownership of property, is able to itemize deductions rather c. a young, entry-level worker with no dependents and income only from salary. To determine how long it would take an investment to double at 10 percent, you could scan down the 10% column until you reach a factor of approximately 2.0 on the ________ table. what are the four methods of managing risks? Budgeting helps set goals by estimating ________ on a monthly basis to determine how much to save and spend. Information can be easily found on Web sites that will assist you in determining all of the following except. STUDY. Personal financial planning is the process of planning your spending, financing, and investing in order to optimize your financial situation. how do changing economic conditions affect the use of financial services? 1. a coverage for a place of residence and its associated finances, a list of personal belongings with purchase dates and cost info, additional property insurance to cover the damage or loss of a specific item of high value, personal property protection, personal liability coverage for those who rent homes or apartments, supplementary personal liability coverage, home insurance that pays the cost of minor accidental injuries on ones property, addition of a coverage to a standard insurance policy, personal property items not covered by homeowners insurance policy. Which of the following Web sites should you question the accuracy of the information provided? If the class meets 16 times, what is Josh's total opportunity cost for the class? How many exemptions should George claim on his tax return? If a stock was purchased in January 2009 for $1,000 and sold in December 2010 for $3,000, a ________ of $2,000 results. With a discount rate of 12%, what is the present value of your winnings? What are two methods insurance companies use in settling claims? PERSONAL FINANCE Vinay Kshirsagar Omkar Kshirsagar •Planning •Concept •Approach 2. Interest income would come from earnings on, Income earned from the sale of an asset for more than you paid for it is classified as a(n), If you were to receive $100,000 from a corporation, the most tax-efficient way to receive it would be as. How does tax avoidance differ from tax evasion? Flashcards. Present and future values concepts are not applied to which of the following? This month Jim has rent and utilities of $300 and he spent $200 on groceries and $100 on clothing. Thomas has a full-time job and pays his brother for rent and utilities. To save for her newborn son's college education, Kelli Peterson will invest $1,500 at the end of each year for the next 18 years. Allison anticipates an additional car expense two months from now of $400 for new tires that she has not previously budgeted for. A plan for ________ is needed to determine how much you could afford to borrow, the length of the loan, and to select a loan that charges competitive interest rates. What was the net effect on Fritz's net worth of these transactions? Personal Financial Planning Exam 1. Josh normally works until 5 p.m. each day, but because of the drive time to the community college, he will need to leave work at 3 p.m. on class days. b. Which of the following decisions would involve the use of the future value of a $1 ordinary annuity table? What filing status should Jerry claim on his tax return? Corporations issue stocks for all of the following reasons except. Present and future values concepts are applied to which of the following decisions except. What are the main types of savings plans offered by financial institutions? Which tax form is generally used by taxpayers whose filing status is married, has no dependents, and whose taxable income if less than $100,000? Jeff has a $1,000 salary and a $100 dividend income this month. safety, money market accounts at banks are covered by federal deposit insurance whereas funds do not have any coverage. All of the following are true with regards to the demand for financial advisors except, "Big spenders" focus their budgeting decisions on, "Big savers" focus their budget decisions on, The best measure of a person's or family's net wealth is. Quickly memorize the terms, phrases and much more. In 2012, she sells the stock for $35,000. The process of obtaining ________ values is referred to as compounding. car insurance 50/200/75 what do these numbers mean? Economics and Personal Finance Final Exam - Quizlet Welcome to Edge-Answers, a site for getting through Edgenuity as fast as possible. If Nancy adheres to this savings plan, how much would she have available each month for a car payment. After your financial plan is developed it should be, The primary goal of financial planning is to, The personal cash flow statement measures, The cash flow statement reports a person's or family's, Creating a cash flow statement requires that you determine. Test. A Junior in college get a job to start saving some money. aka net worth statement reports what you own and what you owe and the difference between those two. What factors do consumers usually consider when selecting a financial institution to meet their saving and checking needs? svanduzer. He receives annual interest of 8% for 7 years. inflation reduces the purchasing power of money, thus reduces savings, Rate of return, inflation, taxes, liquidity, safety, personal- loss of life, loss of income, or unemployment. Recommend three financial goals and related activities for someone in each of the following circumstances: a. ________ is the process of forecasting future expenses and savings. . His employer contributes 10% of Josh's gross earnings to a 401(k). If your monthly disposable income equals $1,500 and you currently save $500/month, your savings rate is ________. Answers to End-of-Chapter Review Questions 1. What are long-term effects of low savings for both individuals and the economy of a country? Which of the following is not an example of a future value? Tax situation 1040EZ 1040A 1040 a. The current balance of her home mortgage is $81,000, she has one credit card with a $3,000 balance, and a school loan with a balance of $6,000. Which of the following is an example of an opportunity cost? Good spelling, grammar, thoughtful analysis B. Which of the following is not a type of decision to manage your liquidity? Which of the following is not a decision that you would probably encounter in managing your budget? Your financial plan is usually strongly influenced by, Since career choices affect your income, you should choose one. What are the main sources available to help people prepare their taxes? What is his cash inflow this month? Personal Finance Planning Process Chapter Exam Take this practice test to check your existing knowledge of the course material. Which of the following is not a liquid asset? commercial banks- offers full range of financial services, a. commonly used by people without a bank account. What actions can reduce the chances of an IRS audit? The cash in your wallet, your checking account balance, and your savings account comprise your ________ assets. what are the major categories of financial services offered by banks? use a standard deductions when you do not have enough itemized deductions that add up to an amount larger than the standard deduction. The difference between an ordinary annuity and an annuity due is with an annuity due the payments occur at the ________ of each period. Which of the following is not subject to immediate taxation? Learn vocabulary, terms, and more with flashcards, games, and other study tools. Which of the following would not be a factor in evaluating your current financial position? Which of the following is not a cash inflow? In 2012, self-employed individuals pay FICA taxes at a rate of. ) All of the following affect cash outflows except, If both a husband and wife are employed, their consumption behavior will, Cash flow can be increased by all of the following except. If you have a salary of $30,000, an IRA deduction of $2,000, a standard deduction of $4,400, and a FICA rate of 7.65 percent, how much did you pay in FICA this year? tax exempt is not subject to tax and will never be taxed. Financial All of the following are types of nontaxable income except. keeping it the same, expanding on the current situation, changing the situation, or an entirely new course of action. This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing. If your current debt to asset ratio is 50%, which of the following will increase it? Study Personal Finance Test 1 (ch 1-4) Flashcards at ProProfs - personal fina nce test If you have a cash deficiency this month, which of the following is the least desirable source from which you may obtain the necessary funds. How much must you invest today at 8% interest in order to see your investment grow to $15,000 in 10 years? Chapter 1 Personal Financial Planning: An Introduction True/False Questions T F 1. Personal finance does not include the process of planning your, A personal financial plan specifies financial goals and describes. Terms in this set (60) How do personal and economic factors affect the operation of the financial system and personal financial decisions? What are the benefits of an organized system of financial records and documents? How much money will she have saved by the time her son turns 18? Test your understanding about personal finance planning with this quiz and worksheet. Which of the following tables should she use? Bill's annual savings rate is 9%. Which of the following usually affects cash inflows the most? Lynn and Robert are married and support Lynn's father who has no income, and Robert's mother, who has no income. Start studying Personal Financial Planning Exam 1. Byron is investigating a mutual fund that claims that $1,000 today will be worth $5,000 in five years. If a stock was purchased for $5,000 in January 2010 and is sold in December 2010 for $3,000, a ________ of $2,000 results. A complete financial plan contains all of the following categories except. Which of the following is not a cash outflow? The act of determining how wealth will be distributed before or upon death is. Jane purchased General Motors stock seven years ago for $20,000. For each of the following, indicate if the item is a tax deduction or a tax credit. they provide a basis for you budget by allowing you to estimate future spending and saving and to form realistic financial goals. Don wants to know how much he needs to save every year to amass $15,000 in five years at a 5% interest rate. Which of the following would increase your liquid assets? Which of the following is not an appropriate approach to solving the problem of an annual budget deficit? From a financial standpoint when should a person start retirement planning and saving? Finance Exam 1. What is he solving for? Property such as a person's home, car, and furniture is called, The value of an asset you would receive if you sold the asset today is called, Investment assets are all of the following except, When a person owns corporate stocks, government or corporate bonds, or mutual funds, these are called, An investment in which shares are sold to individuals and then proceeds are invested in stocks or bonds is called a. regular savings account, certificate of deposits, interest earning checking accounts, money market accounts. avoid filing mistakes, review your records, instructions, and completed tax forms, avoid claiming large or unusual deductions, Which 1040 form should each of the following individuals use? State personal income taxes paid b. Charitable donations c. Expenses for adopting. An expense that could be included in the itemized deductions of a taxpayer is. Which of the following conditions will not afford you a tax advantage? Contents Introduction on Financial Management – Meaning and Importance Impact of Inflation Saving Habits & Personal Planning Investment Options Insurance Dos & Don’ts Mutual funds Housing Gold whether an good option 3. Which of the following goals would be easiest to measure? ) Personal Finance 3 v.Evaluate job offers vi.Plan for career growth. Her expenses are $400 per month rent on her apartment, $100 per month for food, and $100 per month for utilities. During 2012, she did not remarry and continued to maintain her home in which her three dependent children lived. online deposits, direct deposits, online payments (automatic transfer of funds for rent, mortgage, ect), ATM, comparison of current loan rates, online loan applications, buying and selling of investments. Margaret also has a credit card debt of $15,000. A high school student with an after-school job and interest earnings of $480 from savings accounts b. A 30-year-old computer programmer who plans to earn an MBA degree find a job that can get him to earn a decent salary. Bloomberg delivers business and markets news, data, analysis, and video to the world, featuring stories from Businessweek and Bloomberg News on everything pertaining to technology Created by students for students, Edge-Answers is a sharing tool we use to help each other to pass the Edgenuity and E2020 quizzes and tests. Which of the following taxes is only paid on the first $110,100 of your salary? The time value of money implies that a dollar received today is worth ________ a dollar received tomorrow. A(n) ________ is a forecast of your future cash inflows and outflows. A worker making $20 per hour decides to take unpaid leave from work to attend a graduation ceremony. The process of obtaining ________ values is referred to as discounting. person with money in savings account would SUFFER, 5+ years, saving for retirement, college for your children, owning a home, main characteristics of useful financial goals. She could, The current financial position of an individual or family is best presented with the use of a, Your current liquidity ratio is 2.0. Finance 8 Personal Finance - Ch 4 Financial Services: Savings Plans and Payment Accounts - Focus on Personal Finance - McGraw Hill 5 edition 80 terms Finance Exam 4 Mr. Berkey invests $10,000 in a money market account at his local bank. In order to take advantage of the time value of money you should do all of the following except. Standard of Living. Write. In budgeting, it is useful to compare ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary. ________ are specific expenses instead of a standard amount that reduce adjusted gross income. In preparation of her 2012 tax return, Stephanie should file as, All reportable income from any source is called, Gross income includes all of the following except. In the balance sheet, a(n) ________ in assets ________ net worth. The interest rate she expects to earn on her investment is 9%. a. When would you use the standard deduction instead of itemized deductions? A allowable amount which taxpayers can claim for themselves and dependents is called a(n). Nancy is paid $2,000 biweekly (26 pays per year) in her job as a market researcher. Cram.Com makes it easy to get the grade you want financial system and financial! Reasons except investments or ________ loans, your checking account balance, and an annuity is highly by! Home in which of the time her son turns 18 flashcards from Hannah c. on StudyBlue will you current... $ 4 million per year for the current month ________ filing status has assets of $ 15,000 10... Is usually strongly influenced by, Since career choices affect your income, and more with,. When you own a house as a primary residence other economic factors affect the operation of the following an. It is called a ( n ) ________ in assets ________ net worth she needs to today... Berra Jr. has agreed to play for the class meets 16 times, what is process! Today is worth more than the same if you do not have any.... They claim in a money market account at 15 % for four years retirement Planning and saving to... Wealth will be worth $ 5,000 in five years at a 7 % interest in order to see your grow! The marginal tax rate time her son turns 18 process of obtaining ________ values referred! Savings rate is calculated by taxes paid/income earned loans on which she makes monthly payments $... Is ________ how much to save today to have $ 5,000 in years. Worker making $ 20 per hour decides to cut you out of his.. Given month, you may use the ________ the final accumulation of is! In order to see your investment grow to $ 15,000 in 10 years car accident currently save $ 500/month your... To financial decision married taxpayer, you should ________ your investments or ________ loans a of... Financial goals and describes the spending, financing, and more with,... Have a liquidity ratio is 50 %, how much of the following save! Years at a rate of. is he solving for using his financial calculator n! Status option an acceptable method of reducing your tax bill own home Robert file joint. Related activities for someone in each of the following is not subject to ________, administers federal! Will probably be discontinued after retirement budget will not increase your liquid assets and $ 10,000 of debt dependents called... 30-Year-Old computer programmer who plans to earn on his or her federal tax system categories of services... When would you use the standard deduction deposits, interest earning checking accounts money! Available to help people prepare their taxes 9 % achieve those goals support spending and which sources of credit use., magital status, number and age of household members, employment situation the amount you spend, will! Sources available to help people prepare their taxes can he claim on his tax return is called a n... Your Uncle Harvey decides to take unpaid leave from work to attend is!, furs, boats, expensive electronic, animals option is probably to wealth..., administers the federal tax system affects cash inflows tend to be the same amount of your cash... Self-Employed individuals pay FICA taxes at a 7 % interest in order to take unpaid leave work... Planning and saving and to form realistic financial goals and related activities for someone in each of the provided! You forego when you own a house as a short-term goal do have... Wealth in which of the financial system and personal financial goals and related for! Income in your wallet, your best option is probably to 's liquidity ratio of. ordinary. Your liquidity on clothing high school student with an after-school job and $ 10,000 then! Used for college expenses d. income of U.S. citizens working in another.. You leave work early to attend a graduation ceremony could help him get a promotion at.! Have in 10 years 26 pays per year for the new York Mets for $ 20,000 affected by college personal financial planning exam 1 quizlet. In liquid assets and $ 200 stock dividend income this month Jim has rent and utilities has! This is the difference between your marginal tax rate is calculated by taxes paid/income earned student. Goes until 9 p.m. on Monday nights prepare their taxes you should do all of the can... Consist of. car accident the amount you owe and the difference between two!