Business Advance Studies - Financial Literacy Pretest



Business Advance Studies - Financial Literacy Pretest

Multiple Choice

Identify the choice that best completes the statement or answers the question.

____ 1. Rent, house payments, and installment loans are examples of _____.

|a. |fixed expenses |c. |set-asides |

|b. |flexible expenses |d. |none of these |

____ 2. _____ are amounts of money that you accumulate in your budget for special purposes, such as birthdays and holidays.

|a. |Fixed expenses |c. |Set-asides |

|b. |Flexible expenses |d. |none of these |

____ 3. Most bills come due _____.

|a. |once a week |c. |once a year |

|b. |once a month |d. |none of these |

____ 4. According to _____, a lender is required to notify you within 30 days after you have submitted a completed loan application whether the application has been approved.

|a. |the Equal Credit Opportunity Act |c. |the Truth in Lending Act |

|b. |the Fair Credit Reporting Act |d. |none of these |

____ 5. _____ requires that a credit agency show you your file if you are refused credit for a specific reason related to your credit report.

|a. |The Equal Credit Opportunity Act |c. |The Truth in Lending Act |

|b. |The Fair Credit Reporting Act |d. |none of these |

____ 6. _____ limits your liability for credit cards that are lost or stolen to $50 per card if you properly and promptly notify the card issuer of the loss.

|a. |The Equal Credit Opportunity Act |c. |The Truth in Lending Act |

|b. |The Fair Credit Reporting Act |d. |none of these |

____ 7. In the case of defective goods or services, you may withhold a credit card payment if _____.

|a. |you don’t like the product |

|b. |the cost in dispute with a merchant totals more than $50 |

|c. |your money is needed for life-supporting items |

|d. |none of these |

____ 8. Your total earnings before deductions are called _____.

|a. |commissions |c. |gross earnings |

|b. |overtime pay |d. |salary |

____ 9. Taxes, insurance, pensions, and other miscellaneous items are _____.

|a. |wages |c. |gross earnings |

|b. |commissions |d. |deductions |

____ 10. The signature of a payee on the back of a check is a _____.

|a. |W-4 form |c. |commission |

|b. |pay stub |d. |none of these |

____ 11. _____ is usually referred to as Social Security.

|a. |The Equal Credit Reporting Act (ECRA) |

|b. |The Truth in Lending Act (TLA) |

|c. |The Federal Insurance Contributions Act (FICA) |

|d. |none of these |

____ 12. Payment based on a certain percentage of sales is called _____.

|a. |commission |c. |wages |

|b. |salary |d. |none of these |

____ 13. Payment according to what a worker produces is called _____.

|a. |salary |c. |piecework |

|b. |commission |d. |none of these |

____ 14. Payments that all citizens are required by law to make to help pay the costs of government services are called _____.

|a. |deductions |c. |taxes |

|b. |commissions |d. |none of these |

____ 15. A legal statement that authorizes your employer to deduct taxes from your paycheck and to pay them to the government for you is a(n) _____.

|a. |deduction |c. |endorsement |

|b. |W-2 form |d. |W-4 form |

____ 16. _____ are people who lend money.

|a. |Banks |c. |Credit unions |

|b. |Creditors |d. |all of these |

____ 17. The amount of debt that you can afford to repay each month is _____.

|a. |credit history |c. |a multipurpose card |

|b. |consumer finance |d. |credit capacity |

____ 18. A _____ is a record of how you’ve borrowed and repaid debts.

|a. |certificate of deposit |c. |multipurpose card |

|b. |bank |d. |credit history |

____ 19. _____ specialize in real estate loans.

|a. |Savings and loan banks |c. |Credit unions |

|b. |Commercial banks |d. |Consumer finance companies |

____ 20. _____ usually have stricter lending requirements than other lending institutions.

|a. |Banks |c. |Consumer finance companies |

|b. |Credit unions |d. |none of these |

____ 21. _____ specialize in making small loans to borrowers with poor or no established credit.

|a. |Banks |c. |Credit unions |

|b. |Consumer finance companies |d. |Savings and loan companies |

____ 22. _____ require membership in order to borrow money.

|a. |Banks |c. |Credit unions |

|b. |Consumer finance companies |d. |Savings and loan companies |

____ 23. _____ are accepted by most stores, restaurants, hotels, and other establishments to pay for goods and services..

|a. |Credit unions |c. |Credit capacities |

|b. |Creditors |d. |Multipurpose cards |

____ 24. _____ entitles you, as a consumer, to a free credit report every year.

|a. |The Equal Credit Opportunity Act |

|b. |The Fair and Accurate Credit Transaction Act |

|c. |The Fair Credit Reporting Act |

|d. |none of these |

____ 25. MasterCard, Visa, and American Express are examples of _____.

|a. |single-purpose credit cards |c. |multipurpose credit cards |

|b. |revolving charge account cards |d. |none of these |

Business Advance Studies - Financial Literacy Pretest

Answer Section

MULTIPLE CHOICE

1. ANS: A PTS: 1 DIF: Medium REF: Page 404

KEY: budget | finances

2. ANS: C PTS: 1 DIF: Medium REF: Page 404

KEY: budget | finances

3. ANS: B PTS: 1 DIF: Easy REF: Page 403

KEY: budget | finances

4. ANS: A PTS: 1 DIF: Difficult REF: Page 401

KEY: finances

5. ANS: B PTS: 1 DIF: Difficult REF: Page 402

KEY: finances

6. ANS: C PTS: 1 DIF: Difficult REF: Page 402

KEY: finances

7. ANS: B PTS: 1 DIF: Medium REF: Page 400

KEY: finances | conflicts

8. ANS: C PTS: 1 DIF: Easy REF: Page 388

KEY: finances

9. ANS: D PTS: 1 DIF: Medium REF: Page 388

KEY: finances | taxes

10. ANS: D PTS: 1 DIF: Easy REF: Page 388

KEY: finances

11. ANS: C PTS: 1 DIF: Medium REF: Page 390

KEY: taxes | finances

12. ANS: A PTS: 1 DIF: Easy REF: Page 389

KEY: finances

13. ANS: C PTS: 1 DIF: Medium REF: Page 389

KEY: finances

14. ANS: C PTS: 1 DIF: Easy REF: Page 389

KEY: taxes | finances

15. ANS: D PTS: 1 DIF: Difficult REF: Page 389

KEY: taxes

16. ANS: B PTS: 1 DIF: Medium REF: Page 397

KEY: finances

17. ANS: D PTS: 1 DIF: Medium REF: Page 398

KEY: finances

18. ANS: D PTS: 1 DIF: Easy REF: Page 398

KEY: finances

19. ANS: A PTS: 1 DIF: Medium REF: Page 398

KEY: finances

20. ANS: A PTS: 1 DIF: Difficult REF: Page 398

KEY: finances

21. ANS: B PTS: 1 DIF: Medium REF: Page 398

KEY: finances

22. ANS: C PTS: 1 DIF: Medium REF: Page 398

KEY: finances

23. ANS: D PTS: 1 DIF: Easy REF: Page 399

KEY: finances

24. ANS: B PTS: 1 DIF: Difficult REF: Page 401

KEY: finances | consumer

25. ANS: C PTS: 1 DIF: Easy REF: Page 399

KEY: finances

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