SEMESTER 1 EXAM Flashcards
What are the three things you can do about change?
- Accept it
- Reject it
- Ignore it
A natural physical or mental ability is an _____________.
Aptitude
A person you know who has inside information about job openings is called a __________.
Contact
A type of employment agency that seeks out highly qualified people to fill positions is a _____________.
Headhunter
Many schools have _____________ ______________ where students attend classes part of the day and then go to a job that provides supervised field experience.
Cooperative education
What are some employee responsibilities?
Fulfill duties
Communicate effectively
Be respectful
If you claim exempt status on your form W-4 you will not have _________ taxes withheld from your paycheck.
Federal
The Employee’s Withholding Allowance Certificate, commonly known as ________ _____, is used to make allowances for tax withholding purposes.
Form W-4
To instruct an employer to not withhold federal income taxes from your wages is to claim _________ status.
Exempt
The ________ and __________ _________ ____ is a law that allows employees to take unpaid leave for family and medical reasons.
Family and Medical Leave Act
Reductions in the amount of tax withheld from paychecks are known as ____________.
Allowances
By January 31 of the year following the year you were employed, an employer must mail to you a _________ ______showing your total wages and withholdings while you were employed.
Form W-2
A program that provides financial security to workers and their families in the event of an on-the-job illness or injury is called ________ _____________.
Workers’ compensation
The _______ and _______ _____ is a law enacted to set minimum wage and overtime hours.
Wage and Hour Act
T or F? A Social Security Card is issued by the Internal Revenue Service, an agency of the federal government.
False
T or F? The minimum wage changes over time.
True
T or F? Today, all 5 states have workers’ compensation laws or statutes
True.
The form used to determine the amount withheld from a paycheck for income taxes is the ________.
W-4
You should periodically request information to see that your earnings have been properly credited to your account. This request is sent to the _________ ______________ ________________.
Social Security Administration
Premiums for unemployment compensation payments to laid-off workers are paid by ____________.
Employers
What are craft unions and what are some job examples?
Skilled workers
Ex: blacksmith, railroad employees, carpenters
What are industrial unions and what are some job examples?
Semi-skilled or unskilled
Ex: UPS workers
What are some examples of public-employee unions?
Teacher
Police
Firefighter
When deductions are subtracted from gross pay, what is left is known as _____ _____ or take home pay.
Net pay
Profit sharing is a way to encourage employees to do more and better work, and is known as an ___________ ______.
Incentive pay
A group of people working in the same or similar occupations is a _______ _________.
Labor union
The main function of unions is _____________ ______________, which is the process of getting together with employers to negotiate an employment contract.
Collective bargaining
The principle of __________ states that the person who has worked the longest should be the last to be laid off.
Seniority
What is another name for a labor union? Ex: American Bar Association
Professional organization
An effort made to influence legislation to the advantage of a profession is known as __________.
Lobbying
the total or agreed-upon rate of pay or salary is called _______ _____.
Gross pay
A person is _________ when he or she is entitled to a retirement account balance when employment is terminated.
Vested
A type of work schedule that allows employees to choose their working hours is known as __________.
Flextime
______ ___________ is a technique used to train employees to be efficient in more than one specialized area.
Job rotation
When two people share what was originally a full-time position, is is called _____ _________.
Job sharing
A ______________ __________ is the crucial time during the day when all employees are needed at work.
Quarantine period
T or F? Some types of deductions may be withheld from your paycheck without your written consent.
True
T or F? The American Bar Association is a professional organization for lawyers and doctors.
False
T or F? Lobbying for is a legal activity engaged in by many unions and professional organizations.
True
T or F? Profit sharing is an employee benefit required of all employers.
False
Employee services do not include _______ _________.
Profit sharing
A decision facilitated by a neutral third party is called ___________.
Mediation
A tax that increases in proportion to increases in income is known as a ___________ tax.
Progressive
Money paid to a former spouse (which is not taxable income) for that person’s support is called __________.
Alimony
The amount remaining when adjustments are subtracted from gross income is called __________ ________ _________.
Adjusted gross income
In order to avoid itemizing deductions, a person May elect to take the ___________ _____________, which is a flat amount.
Standard deduction
An amount that can be subtracted from your income for each person who depends on your income to live is an ____________.
Exemption
A ____________ tax allows a higher-income person to pay a lower percentage of income in taxes than a lower-income person.
Regressive
A tax system that is based on ______________ _______________ requires all citizens to be responsible for preparing and filing their tax returns on time and paying taxes due.
Voluntary compliance
To intentionally fail to pay taxes owed is to commit a serious crime called _____ ___________.
Tax evasion
a type of tax for which the rate stays the same regardless of income is called ____________.
Proportional
A ______ __________ is an amount subtracted directly from tax owed.
Tax credit
An administrative agency of the federal government that collects taxes and enforces laws is the ______.
IRS
An examination of tax returns by the IRS is called an _______.
Audit
T or F? The income tax is an example of a progressive tax.
True
T or F?Unemployment compensation benefits received are taxable to the person who receives them.
True
T or F? You may not use short form 1040EZ for a joint return if your total taxable income is $20,000 or more.
False
T or F? Alimony is taxable to the person receiving it and F is deductible to the one paying it.
True
What is a form of flat tax?
Property tax
Tax returns must be filed by _______ ___ of the following year.
April 15
As an alternative to itemizing deductions, taxpayers may _______ _____ __________ _________.
Claim the standard deduction
A sales tax on specific products and services is the _______ tax.
Excise
Student loan interest and tuition can be listed as _____________ ___ _______ ________ on Form 1040A.
Adjustments to gross income
An orderly program for spending, saving, and investing the money you receive is known as a ____________ ______.
Financial plan
Money you have to spend as you wish-after all required taxes and deductions-is known as _____________ _________.
Disposable income
A ________ is an organized plan whereby you match your expected income with expenses and savings.
Budget
A ___-________ is a person who promises to pay the debt of another person.
Co-signer
Items of value that a person owns are called ______.
Assets
Amounts of money owed to others, also known as debts, are called __________.
Liabilities
When you subtract your debts from the total amount of things you own, the difference is known as _____ ________.
Net worth
Unwritten agreements, often called ________ contracts are created by the actions or conduct of someone.
Implied
Anything of value exchanged as part of as contract is called _______________.
Consideration
_____________ _________ are persons who are legally able to give sane and intelligent consent and are legally capable of entering into contracts.
Competent parties
A ___________ ___________ is a document that is a written order to release or issue money, the most common of which is a check.
Negotiable instrument
The person who creates and signs a promissory note is called the _______.
Maker
The word __________ means legally collectible.
Negotiable
T or F? When your assets are less than your liabilities, you are said to be solvent, which is a good financial position.
False
T or F? When a person is a minor, the missing element to a valid contract is called consideration.
False
T or F? Net worth is calculated by subtracting your variable expenses from your fixed expenses.
False
T or F? En express contract can only be written (not oral).
False
Families should set aside at least ___ percent of their disposable income each pay period.
10
The IRS can audit your tax returns for a period of ______ years, except in the case of fraud, where there is no time limit.
Three
When a person changes the terms of an offer, he or she has made a _____________.
Counteroffer
When your assets are greater than your liabilities, you are said to be _________.
Solvent
An account on which the depositor can withdraw money at any time is known as a __________ ___________.
Demand deposit
An ____________ occurs when a depositor writes a check on an account that is insufficient to cover a check.
Overdraft
The person authorized to write checks on an account is called the _________ or _________.
Drawer, maker
A ________ endorsement requires two signatures.
Joint
A _______ ____________ is sent by the bank regularly, listing checks and deposits processed by the bank, as well as charges and credits to an account.
Bank statement
_________ cards provide immediate deductions from your checking account when you make a purchase
Debit
Checking accounts at credit unions are called _______ _________.
Share accounts
A check drawn against the bank’s own funds is called a _________ ________.
Cashier’s check
T or F?When a minimum balance is not maintained in a checking account, the bank will usually waive a service charge.
False
T or F? With online banking, you can make deposits and request cashier’s checks.
`False
Checks over ____ ________ old may not be honored by a bank.
Six months
Insurance up to $____________ on each account is provided for depositors by the FDIC.
$100,000
A _________ account charges customers fees based on the number of checks written each month: no minimum balance required.
Special
What should you pay attention to when selecting a savings plan?
Liquidity Safety Convenience Fees Restrictions Interest-earning potential
Money that is paid for the use of money is called _________.
Interest
A regular account at a credit union is called a ________ account.
Share
Deposits kept in credit unions are insured by the _______.
FDIC
Federal insurance for depositors in commercial banks and savings and loans is provided by the ______.
FDIC
A deposit that is set aside for a specified length of time at a specified rate is called a ____________ ___ _________.
Certificate of deposit
A type of savings plan that offers a more competitive interest rate than a regular savings account is called a _________ _________ _________.
Money market account
The capability of financial resources being readily converted to cash is _________.
Liquidity
The day on which a certificate must be renewed or cashed in is called the __________ _______.
Maturity date
When a CD is cashed before its maturity date, the depositor must pay an ________ __________ penalty.
Early withdrawal.
T or F? A subsidized student loan has higher interest rates , and interest begins the say you receive the loan.
False
T or F?Work-study programs will replace your need for other sources of money for college funding.
False
What is not an example of a long-term savings goal?
Automobile purchase
What criteria should you consider when choosing an investment?
Safety
High liquidity
High dividends or interest
Tax benefits
What are some sources of financial information?
Newspapers
Financial magazines
Financial advisers
An _________ ________ is a document that gives the financial history of a corporation.
Annual report
Government actions that affect business profits are called __________ risk
Political
Sections of newspapers containing financial data are called the __________ ________.
Financial pages
A ________ is a person who buys and sells securities for clients.
Broker
__________ _________ provide financial data for interpretation.
Investor services
__________ brokers buy and sell securities for clients for a reduced commission.
Discount
The spreading of risk among many types of investments is called _____________.
Diversification
_________ are debt obligations of corporations or a government.
Bonds
A ________ ______ pools money of many investors and buys a large selection of securities.
Mutual fund
An _________ is a contract issued by an insurance company that pays a series of regular payments, usually after retirement.
Annuity
_________ are contracts to buy and sell commodities for a specified price on a specified future date.
Futures
Low-priced stocks of companies that have no track record are called _______ stocks.
Penny
T or F? Political risk refers to the effects of higher interest rates when you are locked into lower rates.
False
Treasury bills are issued for ____ year(s) or less.
1
What is a savings plan where an individual invests on a regular and planned basis?
systematic investment
What are examples of low risk investments?
Corporate bonds
Municipal bonds
Treasury securities
U.S. Government savings bonds
What are some examples of medium risk investments?
Mutual funds
Annuities
Real estate
Self-managed retirement accounts
What are some examples of high risk investments?
Penny stocks Stocks Commodities Futures Options Collectibles
What are some advantages of consumer credit?
Purchasing power
Emergency funds
Convenience
Safety
What are some disadvantages of consumer credit?
Higher prices
Finance charges
Tie up income
Overspending
A _______ ____ ________is a pre-established amount that can be borrowed on demand
Line of credit
Something of value that can be sold to pay a debt is often referred to as ___________.
Collateral
_______-______ _________ is credit whereby you can add purchases up to a set credit limit.
Open-end credit
A loan for a specific amount that must be repaid in full, including finance charges, by a stated due date, is called _______-_____ ________.
Closed-end credit
A ______ ________ is money borrowed against the credit card limit.
Cash advance
A manufacturer-related company, called a ______ __________ _________, makes loans through authorized representatives.
Sales finance company
________ _________ are unlicensed lenders who charge illegal interest rates.
Loan sharks
A service to customers called ___________ _________ allows you to charge now and not be billed for several months.
Deferred billing
The interest you pay for the use of credit called a __________ ________.
Finance charge
_________ credit is having work performed and paying for it later.
Service
Small loan companies, also called _________ __________, charge higher interest rates and take more risk.
Finance companies
In some states, maximum interest rates are set by _______ laws.
Usury
A _____________ is a legal business where loans are made based on the value of merchandise used as collateral
Pawnbroker
T or F? Interest rates on loans are usually higher at credit unions than they are at banks.
False
T or F? Affinity cards charge higher interest rates than regular bank credit cards.
False
What is an example of service credit?
Telephone bill
New purchases may or may not be added on to installment purchase agreements?
may not be added on
What things appear on your credit report?
Marriage/divorce
Bankruptcy
If you’re being sued
Credit history
What is another name for the Consumer Credit Protection Act?
Truth in lending law
A member of the credit bureau is called a __________ and pays fees for use of the bureau’s services in collecting information and issuing reports.
Subscriber
_______ scores are the credit scores many lenders use to determine credit risk.
FICO
___________ is the ability to repay a loan or make payments on a debt out of current income.
Capacity
Existing debts, stability of employment, and personal factors that determine a person’s ability to meet financial obligations are called __________.
Conditions
A _______ _________ is a business that accumulates, stores, and distributes credit information to members.
Credit bureau
A _______ _________ is a type of rating used by credit bureaus in determining a person’s general credit worthiness
Point system
A ______ __________ is a person hired to collect the balance due.
Debt collector
If you believe there is an error in your statement, your complaint must be in writing and mailed within ____ days after you receive the statement.
60
What are the 5 C’s of credit?
Character Capacity Collateral Conditions Capital
To pay your bills on the due date or soon after is to earn a ______ credit rating.
Good
The act known for its provisions requiring full disclosure of all costs in a credit transaction is called the ________-____-_________ _____.
Truth-in-lending act
What are some advantages of renting?
Mobility Convenience Social life Lower living expenses Minimal responsibilities
What are some disadvantages of renting?
Noise Lack of privacy Small quarters Lack of storage Lack of parking
A _____ is a nonrefundable charge for a service.
Fee
A ________ _________ is a refundable amount paid in advance to protect the owner against damage or nonpayment.
Security deposit
A _______ is a written agreement to rent property at a certain price for a specified time period.
Lease
A studio apartment, or ___________ ____________, is a single room serving as a kitchen, living room, and bedroom.
Efficiency apartment
T or F? Furniture and furnishings that are purchased jointly must be divided when the living arrangement is dissolved.
True
T or F? a lease move-in special is always advantageous to the renter, even if he/she has to move out early.
False
A refundable down payment is a _______.
Deposit
Finding out how much money you can borrow is a process called ___________
Preapproval
Each car has a unique _________ ______________ _________ that identifies it
Vehicle identification number (VIN)
__________ ______-_____ are high-priced, high-profit dealer services with little or no value
Dealer add-ons
A contractual agreement called _________ allows monthly payments for the use of a vehicle without ownership.
Leasing
The decline in value of a vehicle during its lifetime is called _____________.
Depreciation
Very old vehicles in excellent condition may ___________, or increase in value.
Appreciate
Coarse and strong chemicals, called ____________, can damage the paint on a car.
Abrasives
A ___________ ______________ can be used to rid the surface of a car of scratches, scuffs, and stains.
Polishing compound
A _________ is a type of vehicle that uses alternate energy sources.
Hybrid
The Federal Trade Commission requires dealers to place a sticker, called the _________ _________, on all used cars they offer.
Buyer’s Guide
T or F? Preapproval adds to the total costs of buying a car.
False
T or F? Dealer add-ones are considered unnecessary and expensive.
True
T or F? Lemon laws generally require you to have good documentation of your car’s problems.
True
T or f?Leasing a car is a good idea for most, if not, all car drivers.
False
____________ is a method for spreading individual risk among a large group of people to make losses more affordable for all.
Insurance
______ is the uncertainty as to a financial loss, increased by perils and hazards.
Risk
The _________ is usually paid at regular intervals by the policyholder.
Premium
What risk does life, health, and disability involve?
Personal risks
What risk does fire, theft, wind, rain, accident, and natural disaster involve?
Property risks
What risk does car accidents, personal injuries, and business mistakes involve?
Liability risks (responsibility)
What should you do when making a risk-management plan?
Increase deductibles Purchase group insurance Comparison shop Consider payment options Look for discounts
What are som factors that affect the cost of automobile insurance?
Model, style, and age of car Location Distance driven Age and sex of other regular drivers of the car Purpose of driving
What is liability coverage for?
People (injuries)
What is collision coverage for?
Car crashes or any collision
What is comprehensive coverage for?
Anything thats not collision
ex: tree falling on car
WHat is uninsured/underinsured motorist coverage for?
If you crash and the other person doesnt have insurance, your insurance covers it
__________ _____________ ___________ is a personal catastrophe policy and it supplements your basic auto and property liability coverage.
Umbrella Liability Insurance
What is the purpose of the form W-4?
So your employer can withhold the correct federal income tax from your pay
What information is listed on form w-4
Your personal information
Total number of allowances you are claiming
What is the purpose of the form W-2?
Wage and Tax Statement
What is listed on the Form W-2?
Your total wages and withholdings while you are employed
What do you need a form W-2 for?
To complete a tax return
