Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Financial planning allows family members to…
a. | buy more supplies on credit. | c. | eliminate energy
bills. | b. | buy stocks at bargain rates. | d. | prepare for emergency
expenses. |
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2.
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Premature affluence gives some teens a false sense of…
a. | ability. | c. | security. | b. | intelligence. | d. | wealth. |
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3.
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To calculate your net worth, you must know the amount of your…
a. | budget. | c. | expenses. | b. | debts. | d. | income. |
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4.
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Debts owed to others are considered…
a. | assets. | c. | liabilities. | b. | expenses. | d. | trade-offs. |
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5.
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The purpose of a balance sheet is to determine your…
a. | budget. | c. | income. | b. | credit card debt. | d. | net worth. |
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6.
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Financial software is…
a. | not necessary. | c. | usually free. | b. | required by most banks. | d. | very limited in its
capabilities. |
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7.
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A disadvantage of financial software is that it…
a. | can’t be used to track stocks. | c. | may be costly. | b. | is seldom
upgraded. | d. | reduces your
privacy. |
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8.
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Advantages of financial software include all of the following
EXCEPT…
a. | it can help you track your spending. | b. | it eliminates the possibility of incorrect
data. | c. | it makes it easy to review your financial plan. | d. | it might include
online features. |
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9.
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Of the following, the task that could NOT be aided by financial software
is…
a. | calculating your net worth. | c. | shopping for
bargains. | b. | preparing a tax return. | d. | tracking a credit card account. |
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10.
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Of the following, the step that is LEAST likely to be helpful when you’re
shopping for a financial software package is…
a. | contacting your bank. | c. | reading independent reviews. | b. | evaluating what
features you need. | d. | trying a
demo version. |
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11.
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The best description of a budget is…
a. | a financial tool for consumers who have very little money. | b. | a plan for saving
and spending your money. | c. | a set of restrictions on how you can spend your
money. | d. | a statement of your assets and liabilities. |
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12.
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A budget can help you do any of the following EXCEPT…
a. | avoid running out of money between paychecks. | b. | earn more income to
cover your needs and wants. | c. | evaluate your spending habits and make better
choices. | d. | set aside savings for unexpected expenses. |
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13.
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The amount of money you expect to receive after paycheck deductions
is…
a. | earned income. | c. | gross income. | b. | fixed income. | d. | net income. |
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14.
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Rent is an example of…
a. | discretionary expense. | c. | net expense. | b. | fixed expense. | d. | variable
expense. |
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15.
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According to Bureau of Labor Statistics, the two largest categories for U.S.
consumer spending are…
a. | food and clothing. | c. | health care and utilities. | b. | food and personal
insurance. | d. | housing and
transportation. |
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16.
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Of the following, the document most likely to be used as proof of identity
is…
a. | a cancelled check. | c. | a passport. | b. | an insurance policy. | d. | a tax return. |
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17.
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The most likely reason for keeping a record of donations to charity
is…
a. | for legal proof. | c. | for medical reasons. | b. | for loan applications. | d. | for tax
purposes. |
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18.
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Pay stubs should be kept…
a. | for three months. | b. | until two years past the end of
employment. | c. | until you have verified your bank statement. | d. | until you have
verified your W-2. |
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19.
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Tax returns should be kept…
a. | until one year from the filing date. | c. | until seven years from the filing
date. | b. | until three years from the filing date. | d. | permanently. |
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20.
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To archive a document means to…
a. | certify that it is authentic. | c. | put it in long-term
storage. | b. | discard it by shredding. | d. | register it at the county clerk’s office. |
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21.
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A home filing cabinet is an appropriate place to store all of the following
EXCEPT…
a. | bank statements. | c. | insurance policies. | b. | copies of tax returns. | d. | property deeds. |
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22.
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Opening a safe deposit box requires…
a. | a combination. | c. | one key. | b. | a password. | d. | two separate
keys. |
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23.
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Cancelled checks should be kept…
a. | for three years. | b. | for six years. | c. | until you have
verified your bank statement. | d. | permanently. |
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24.
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The recommended place to keep an original birth certificate is a…
a. | desk drawer. | c. | locked briefcase. | b. | filing cabinet. | d. | safe deposit
box. |
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25.
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Licenses, certifications, or degrees that indicate that a person is qualified to
perform a certain service are called…
a. | accomplishments. | c. | credentials. | b. | business. | d. | profession. |
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26.
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If you are looking for assistance with a tax return, which professional would be
the best choice?
a. | accountant | c. | chartered financial consultant | b. | certified financial
planner | d. | stockbroker |
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27.
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Which of the following services are attorneys NOT qualified to provide?
a. | handling a complicated tax situation | b. | helping you prepare a will | c. | reviewing documents
for a home purchase | d. | selling you an insurance
policy |
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28.
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If an attorney offers services pro bono, the services are…
a. | at no charge. | c. | on commission. | b. | for the public good. | d. | to professionals
only. |
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29.
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To check the credentials of a stockbroker, you should call…
a. | American College, Bryn Mawr, PA. | b. | Stockbrokers Unlimited. | c. | the local or state
bar association. | d. | the National Association of Securities Dealers. |
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