Practice Test Answers

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2
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Which is considered a good credit practice?

A
Use the credit card with the highest interest rate.
B
Make late payments.
C
Pay more than the minimum amount that is due.
D
Borrow more than one can afford to repay.
3

What are possible advantages and disadvantages of using automatic withdrawal to pay bills? Choose four correct answers.

A
not having to find a stamp and a mailbox
B
having to share your account information
C
having to pay a fee for the service
D
not knowing when the payment will be taken out of your account
E
not having to keep track of the balance in a checking account
F
possible overdraft fees if there is not enough money in the account to cover the payment amount
G
avoiding late payment fees
4

A refrigerator is priced at 1 dollars comma 250 There are two options offered to reduce the price: either a 25 percent discount off the price or a rebate of 300 dollars Which is the better choice, and what is the extra amount saved?

A
The rebate is better; it saves 12 point 5 0 dollars more.
B
The 25 percent discount is better; it saves 75 dollars more.
C
The 25 percent discount is better; it saves 12 point 5 0 dollars more.
D
The rebate is better; it saves 75 dollars more.
5

Yuri wants to pay for his new chair using a check. What must he consider before using that method of payment?

A
Yuri must be sure he has enough left in his checking account for any expenses and automatic payments.
B
Yuri must check his credit card balance.
C
Yuri must check his credit history.
D
Yuri must know the interest rate on a furniture loan.
6

Which are shown on a balance sheet? Choose three correct answers.

A
age
B
liabilities
C
time period
D
assets
E
date of birth
8

Jessica is trying to get a credit card. She has a credit score of 790. How is Jessica’s lender likely to view this credit score?

A
Jessica is low risk but will not pay her outstanding balances on time.
B
Jessica is high risk and will pay her outstanding balances on time.
C
Jessica is high risk but will not pay her outstanding balances on time.
D
Jessica is low risk and will pay her outstanding balances on time.
9

Credit unions differ from retail banks because they are

A
owned by shareholders who purchased stock.
B
owned by their employees.
C
owned and managed by private corporations.
D
owned by their members.
10

Why were savings and loans (S&Ls) originally established?

A
to help people buy homes
B
to help people invest in the stock market
C
to help people save money
D
to help people invest in small businesses
11

Fiona wrote a check to the veterinarian for $⁢89.56. She’ll use the check register to record her transaction. What will be her new balance? Open image in full-screen view

A
2 dollars comma 484 point 8 3
B
2 dollars comma 575 point 4 4
C
2 dollars comma 458 point 9 4
D
2 dollars comma 549 point 5 5
13

Phung works as a pharmacist in Tampa, Florida. Her income is $⁢116,200 a year. Which statements about Phung’s income and tax situation are correct? Choose three correct answers.

A
Phung will pay 28 percent of her total income in federal taxes.
B
The first 9 dollars comma 075 she makes each year will be taxed at 10 percent .
C
Phung will pay 28 percent of her total income in state taxes.
D
After 36 dollars comma 000 , Phung’s taxable income will experience the greatest tax bracket increase.
E
Portions of Phung’s income will be taxed at 10 percent , 15 percent , 25 percent , and 28 percent .
14

According to this W- 2 , how much Social Security tax was withheld from John T. Smith’s income for 2012?

A
2 dollars comma 567 point 4 5
B
612 point 6 5 dollars
C
44 dollars comma 567 point 3 4
D
1 dollars comma 756 point 5 6

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