Question 1

Managing the finances of a household is similar to managing the finances of a small business.

Accepted Answer

A) True 
 B)False  True

Question 2

In saving for retirement,Penny could take advantage of the unique tax shelter offered only to small-business owners in a:

Accepted Answer

A) 401k)plan. 
B) simple IRA plan. 
C) Roth plan. 
D) Keogh plan. 
A) 401k)plan. 
B) simple IRA plan. 
C) Roth plan. 
D) Keogh plan. D

Question 3

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. 
A) insurance salespeople. 
B) financial planners. 
C) portfolio managers. 
D) stockbrokers. B

Question 4

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Accepted Answer

A) True 
 B)False

Question 5

Regardless of potential changes,you can count on Social Security to provide you with a comfortable retirement.

Accepted Answer

A) True 
 B)False

Question 6

Most people find it relatively easy to live frugally.

Accepted Answer

A) True 
 B)False

Question 7

One step toward the goal of taking control of your finances is to keep track of all your expenses.

Accepted Answer

A) True 
 B)False

Question 8

The first step you would take to get control of your personal finances is to:

Accepted Answer

A) keep track of all your expenses. 
B) prepare a budget. 
C) take inventory of your assets. 
D) start a savings program. 
A) keep track of all your expenses. 
B) prepare a budget. 
C) take inventory of your assets. 
D) start a savings program.

Question 9

The key to generating enough capital for investment for many individuals is to:

Accepted Answer

A) obtain as many credit cards as possible in order to maximize spending power. 
B) live frugally. 
C) borrow money from friends and family. 
D) buy only high quality consumer goods. 
A) obtain as many credit cards as possible in order to maximize spending power. 
B) live frugally. 
C) borrow money from friends and family. 
D) buy only high quality consumer goods.

Question 10

Roberto has just opened a 401k)retirement plan.The money he invests in this plan will reduce Roberto's present taxable income.

Accepted Answer

A) True 
 B)False

Question 11

The tax-deferred investment plan that allows employees to save part of their income for retirement is called an):

Accepted Answer

A) 60/40 plan. 
B) individual retirement account. 
C) 704i)plan. 
D) Keogh plan. 
A) 60/40 plan. 
B) individual retirement account. 
C) 704i)plan. 
D) Keogh plan.

Question 12

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

Accepted Answer

A) True 
 B)False

Question 13

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 flows 
A) income statement 
B) balance sheet 
C) budget 
D) statement of cash flows

Question 14

The earnings of a traditional individual retirement account IRA)are:

Accepted Answer

A) taxed at the time they are earned. 
B) not taxed. 
C) taxed when the funds are withdrawn. 
D) subject to the double taxation of all dividends. 
A) taxed at the time they are earned. 
B) not taxed. 
C) taxed when the funds are withdrawn. 
D) subject to the double taxation of all dividends.

Question 15

Describe the major steps involved in estate planning.

Accepted Answer

For people with young children,the first

Question 16

The three factors that have the greatest influence on how the value of your home increases over time are: 1)size square feet),2)age,and 3)design features.

Accepted Answer

A) True 
 B)False

Question 17

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Accepted Answer

A) credit cards are no longer accepted in many places as a valid source of credit. 
B) credit cards require that at least 25% of the balance be paid each month. 
C) there will be a finance charge even if Hannah pays her entire credit card balance in full and on time. 
D) the convenience of credit cards can lead to excessive debts. 
A) credit cards are no longer accepted in many places as a valid source of credit. 
B) credit cards require that at least 25% of the balance be paid each month. 
C) there will be a finance charge even if Hannah pays her entire credit card balance in full and on time. 
D) the convenience of credit cards can lead to excessive debts.

Question 18

Your big screen HDTV would be listed as an asset on your personal balance sheet.However,the loan you took out to buy the TV would be listed as a personal liability.

Accepted Answer

A) True 
 B)False

Question 19

When you prepare your personal balance sheet,remember that your ________ is equal to your total assets minus any liabilities you have.

Accepted Answer

A) net income 
B) net worth 
C) tax base 
D) cash equivalent value 
A) net income 
B) net worth 
C) tax base 
D) cash equivalent value

Question 20

The money a worker invests in a 401k)retirement account reduces that worker's present taxable income.

Accepted Answer

A) True 
 B)False

Exam 25: Managing Personal Finances

Managing the finances of a household is similar to managing the finances of a small business.

In saving for retirement,Penny could take advantage of the unique tax shelter offered only to small-business owners in a:

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

Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.

Regardless of potential changes,you can count on Social Security to provide you with a comfortable retirement.

Most people find it relatively easy to live frugally.

One step toward the goal of taking control of your finances is to keep track of all your expenses.

The first step you would take to get control of your personal finances is to:

The key to generating enough capital for investment for many individuals is to:

Roberto has just opened a 401k)retirement plan.The money he invests in this plan will reduce Roberto's present taxable income.

The tax-deferred investment plan that allows employees to save part of their income for retirement is called an):

Pete wants life insurance to provide benefits for his family if he were to die.He also wants part of his premium to go into a savings plan that he will need if he lives to retirement age.His best strategy to achieve insurance and savings with one premium is term insurance.

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

The earnings of a traditional individual retirement account IRA)are:

Describe the major steps involved in estate planning.

The three factors that have the greatest influence on how the value of your home increases over time are: 1)size square feet),2)age,and 3)design features.

Hannah is excited about getting her first credit card.However,she should be aware of the fact that:

Your big screen HDTV would be listed as an asset on your personal balance sheet.However,the loan you took out to buy the TV would be listed as a personal liability.

When you prepare your personal balance sheet,remember that your ________ is equal to your total assets minus any liabilities you have.

The money a worker invests in a 401k)retirement account reduces that worker's present taxable income.

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Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money,financial Institutions,and the Federal Reserve

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Using Technology to Manage Information

Managing Risk

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