Progress Test 2 Flashcards

Flashcards based on Progress Test 2 questions and answers.

You would list which transaction as a DEBIT in your check register?

A. a payment you make on a bill

Incoming payment from your job is a __ in your check register.

A. credit

On a credit card statement, the total amount you owe is the

C. balance

Reconciling a bank statement means

B. comparing your check register and your monthly bank statement

Minimum distribution rates require owners of __ to start withdrawing money by the age of 70 ½.

C. traditional IRAs

Which agency insures depositors’ accounts up to at least $250,000?

C. Federal Deposit Insurance Corporation

Suppose your total pay each month is $4,000. Your employer deducts $300 for income tax, $100 for FICA tax, and $100 for health insurance. What is your GROSS pay each month?

B. $4,000

A __ market is a time of falling stock prices.

A. bear

What is an example of OPEN-END credit?

C. a credit card

Making sure a goal is possible to reach is which part of the SMART Goal Process?

C. having an attainable goal

What is an advantage of a traditional IRA?

C. Contributions are tax deductible

Which factor is most important in determining your credit rating?

C. your payment history

Bodily injury liability insurance covers a driver whose actions injure someone else.

A. true

When an employer automatically credits money to your bank account, it is a(n)

B. direct deposit

Payments that distribute a company’s profits to stockholders are

C. dividends

Which kind of stock allows stockholders to vote on company matters?

A. common stock

Commercial banks make money from interest charged on loans and from other investments.

A. true

Suppose you put $5,000 in a certificate of deposit for ONE year. The account has an interest rate of 4 percent. What will your simple interest be?

B. $200

With a __ purchase, funds are automatically withdrawn from your own account.

B. debit card

How can you avoid paying interest on credit card debt?

C. Pay your entire balance each month

Compounding interest means

A. adding interest to the principal in your account

The balance of a checking account is

C. the amount of money in the account

The rental agreement for an apartment is called a(n)

B. lease

Which type of mortgage has an UNCHANGING interest rate and installment payment for the life of the loan?

C. fixed-rate mortgage

A record of transactions in an account that you keep for yourself is a(n)

C. checkbook register

Which kind of stock pays regular dividends at fixed rates?

B. preferred stock

Diversification is

B. putting your money in a variety of investments

Annual percentage yield (APY) on a certificate of deposit includes compound interest.

A. true

A W-2 form is

C. a record of how much a taxpayer earned in a tax year

An hourly rate of pay is a

C. wage

The standard form used for filing federal tax returns each year is the

A. Form 1040

The main goal of a __ is allowing the user to accumulate money for future use.

B. savings account

The decrease in a car’s value because of use and age is

C. depreciation

Suppose a homeowner owes $100,000 on a house, and the house has a market value of $275,000. How much equity does the homeowner have?

A. $175,000

A bank statement is

B. a statement of transactions that a bank sends to you each month

Buying stock in the secondary market means

B. buying stock from another investor after its initial sale

An agreement in which a buyer lends money to a government or corporation

B. bond

A will is

A. a legal document that explains someone’s wishes for his/her estate after death

Every dollar of an American worker’s gross earnings is taxable income.

B. false

A __ is a share of ownership in a corporation.

B. stock

Which factor affects the amount of a monthly payment on a home loan?

A. the size of the down payment

Which tax pays for Social Security and Medicare?

A. FICA taxes

A safe driving record can mean a lower premium for auto insurance.

A. true

A commercial bank can only be chartered by the federal government.

B. false

The three-legged stool of retirement savings includes

C. employer-sponsored plan, personal savings, and Social Security

Which investment is a personal retirement account?

C. traditional IRA

What is a tax-deferred retirement investment?

B. an account on which you pay no taxes