Financial Services Quiz 1 Review

Discretionary Income is the inflows of cash to an individual or a household.

A tax audit is the total tax due divided by taxable income.

Financial plan summarizes your current financial situation, analyzes your financial needs & recommends future actions

Cash Flow is the actual inflow and outflow of cash during a given time period.

Savings is a type of financial services providing mortgages for future use.

Adjusted Gross Income is gross income after a certain reduction have been made.

A tax shelter is an investment that provides immediate tax benefits and an expectation of a future financial return

A Credit Union is a traditional association specializing in savings accounts and mortgages.

The following are examples of checking accounts EXCEPT: 

Opportunity cost is what a person gives up by making a choice.

What is a tax levied on the value of property bequeathed or left by a deceased person?

Jenin knows how to roll over

What is the increase in an amount of money as a result of interest earned? 

Long-Term Liabilities are debts that are required to be paid in 6 months. 

Effective Financial Planning includes all steps EXCEPT: 

Mr. Jones has liabilities in the amount of $5,000 and net worth of $20,000. What is his Debt Ratio? 

Which type of financial institution is owned by depositors and also specializes in savings accounts and mortgages? 

How much interest would a person earn for $500 deposit at 6 percent for a period of 6 months? 

These are the different types of income EXCEPT: 

What is the Future Value of $200 if you deposited it into a 5 percent account for 1 year? 

Ms. Jackson has total assets of $200,000 and total liabilities of $60,000. What is her Net Worth? 

Liquid Assets allow you to withdraw your money on short notice without a loss of values and fees. 

The Basics of Federal Income Tax DOES NOT include: 

Surplus is the amount of which actual spending is less than planned spending.

Trust is a legal agreement that provides for the management & control of assets by one party for the benefit of another

Taxes owed could be reduced by a tax credit. 

These are all the steps to creating a Cash Flow Statement EXCEPT: 

Inflation is the DECREASE in the general level of prices. 

Present Value is the current value for a future amount based on a certain interest rate and a certain time period.

If you earned a 4.5 percent return on your savings, with a 16 percent tax rate, what is the after-tax rate of return?

The following are all personal financial statements EXCEPT: 

What formula allows you to determine how much to deposit now to obtain a desired total in the future? 

Gross Salary: $54,000 Dividend Income: $100 Interest Earnings: $80, Standardized Deductions: $12,000 taxable income: ?

Which type of Certificate of Deposit offers an opportunity to withdraw money without a penalty? 

Sean has a taxable income of $60,000 and a total tax bill of $5,000. What is his average tax rate? 

A Budget is a specific plan for spending income; also called a spending plan.

Economics is the stages in the family situation and financial needs of an adult.

Ms. Harrison has total assets of $150,000 and total liabilities of $60,000. What is her Net Worth? 

Total Tax Due divided by Taxable Income is Exemption.