Chapter 7,8&9 Review
- What is a revenue bill?
- Who qualifies for the head of household filing status?
- What is a budget? How often should they be created?
- What is consideration?
- What is a payee?
- What does a personal record keeping system do?
- What are some advantages of computerized record keeping?
- Define floating a check. Is it legal?
- What is the purpose of the column headed by a check mark in a checkbook register?
- A check cannot be cashed until it has been ______.
- The largest source of government revenue in the United States is ______.
- A tax for which the rate stays the same, regardless of income, is called a ______.
- In the United States, the power to impose federal taxes rests with
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- In this kind of audit, the IRS sends a letter to the taxpayer, asking him or her to answer specific questions about the tax return.
- What is a flat tax? Examples?
- In the United States, the responsibility for filing a tax return rests with the individual. This defines the concept of
- Your filing status on your tax return is based on
- Provide examples of non-taxable income
- A tax _____ is an amount subtracted directly from the tax owed.
20.You must file your tax return by this date every year.
21.When preparing a budget, you need to focus mostly on your
22.What is a balanced budget?
23.Most experts recommend saving ___ percent of your disposable income each pay period.
24.Define and example of a variable expense?
25Define and example of an asset.
26.The IRS has the legal right to audit your tax returns and supporting records for ___ years from the date of filing.
27.When one person makes an offer and another person changes it, the second person is making a ______.
28.Example of a contract that must be signed to be legally binding
29.A person who creates and signs the promissory note and agrees to pay it on a certain date is called the
30.A computer program that organizes data in columns and rows and can perform calculations using the data is called a
31.The person who cashes a check is called the
32.When a check is returned to the payee’s bank due to insufficient funds, the check is said to have
33.When you open a checking account, most banks will require you to have an initial deposit of at least
34.Which part of a check provides a place for you to write the purpose of the check?
35.When someone writes a check they should record this amount in his checkbook register in the
36.A check is written to Taylor Thomas. On the back of the check, Taylor writes “Pay to the order of Rose Dryer,” then signs her name. What kind of endorsement is this?
37.An interest-bearing checking account that pays a higher rate of interest than a usual account, but typically has more restrictions, is called a
38.A check written by a bank on its own funds is called a
39.A request that a bank not honor a specific check is called a(n)
40.A person or institution that manages property for the benefit of someone else under a special agreement is called a(n)
41. Incoming funds to the government are called ______.
42.Sales taxes on specific goods and services, such as gasoline or cigarettes, are called ______taxes.
43.Willful failure to pay taxes is called tax ______.
44.Tax rates apply to different income ranges, or tax ______.
45.A(n) ______is an amount you may subtract from your income for each person who depends on your income to live.
46.Someone who lives with you and for whom you pay more than half of his/her living expenses is called a(n) ______.
47.Money paid to support a former spouse is called ______.
48.Money paid to a former spouse for support of dependent children is called ______support.
49.Your ______income is the money you have left to spend or save after taxes and other required deductions are taken.
50.A spending and saving plan based on your expected income and expenses is called a(n) ______.
51.______expenses are costs that do not change from month to month.
52.A legally enforceable agreement between two or more people is called a(n) ______.
53.A(n) ______or guarantee is a statement assuring quality and performance of a product or service.
54.A checking account is also called a(n) ______deposit, because the money may be withdrawn at any time.
55.A check written for more money than your account contains is called a(n) ______.
56.A booklet used to record checking transactions is called a checkbook ______.
57.A personal check that the bank guarantees to be good is called a(n) ______check.
58.A(n) ______card is a plastic card that allows immediate deductions from a checking account to pay for purchases.
59.With ______protection, your checks will be covered even if you have insufficient funds in your checking account.
60.A(n) ______verifies a person’s identity, witnesses the person’s signature on a legal document, and then “notarizes” the signature as valid.
Short Answer
61.Are sales taxes progressive or regressive? Explain your answer.
62.Under what circumstances would you not be allowed to claim an exemption for yourself on your tax form?
63.What is a cash surplus?
64.What does it mean to float a check?
65.What is an ABA number? Explain the two parts of an ABA number.
Essay
66.What are the main functions of the Internal Revenue Service? What are some other services the IRS offers to taxpayers?
67.What is an audit? What should taxpayers do if they are being audited?
68.Explain the difference between an express contract and an implied contract. Provide an example of each.
69.What is a checking account? Describe several advantages of a checking account.
70.What is the best way to avoid banking fees?
Chapter 7,8&9
Answer Section
TRUE/FALSE
1.ANS:FPTS:1
2.ANS:FPTS:1
3.ANS:FPTS:1
4.ANS:FPTS:1
5.ANS:FPTS:1
6.ANS:FPTS:1
7.ANS:TPTS:1
8.ANS:TPTS:1
9.ANS:FPTS:1
10.ANS:FPTS:1
MULTIPLE CHOICE
11.ANS:DPTS:1
12.ANS:APTS:1
13.ANS:CPTS:1
14.ANS:BPTS:1
15.ANS:CPTS:1
16.ANS:BPTS:1
17.ANS:DPTS:1
18.ANS:APTS:1
19.ANS:BPTS:1
20.ANS:BPTS:1
21.ANS:BPTS:1
22.ANS:DPTS:1
23.ANS:APTS:1
24.ANS:CPTS:1
25.ANS:BPTS:1
26.ANS:BPTS:1
27.ANS:DPTS:1
28.ANS:APTS:1
29.ANS:BPTS:1
30.ANS:CPTS:1
31.ANS:APTS:1
32.ANS:CPTS:1
33.ANS:DPTS:1
34.ANS:BPTS:1
35.ANS:CPTS:1
36.ANS:APTS:1
37.ANS:DPTS:1
38.ANS:BPTS:1
39.ANS:BPTS:1
40.ANS:APTS:1
COMPLETION
41.ANS:revenue
PTS:1
42.ANS:excise
PTS:1
43.ANS:evasion
PTS:1
44.ANS:brackets
PTS:1
45.ANS:exemption
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46.ANS:dependent
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47.ANS:alimony
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48.ANS:child
PTS:1
49.ANS:disposable
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50.ANS:budget
PTS:1
51.ANS:Fixed
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52.ANS:contract
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53.ANS:warranty
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54.ANS:demand
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55.ANS:overdraft
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56.ANS:register
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57.ANS:certified
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58.ANS:debit
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59.ANS:overdraft
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60.ANS:notary public
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SHORT ANSWER
61.ANS:
Sales taxes are regressive because people with lower incomes pay a larger percentage of their income for sales taxes than do people with higher incomes.
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62.ANS:
You are not allowed to claim an exemption for yourself on your tax form if someone else claims you as a dependent on his/her return.
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63.ANS:
A cash surplus occurs when income exceeds expenses.
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64.ANS:
Floating a check occurs when someone writes a check, hoping to deposit money to cover it before it clears.
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65.ANS:
The American Bankers Association (ABA) number appears in fraction form in the upper right corner of each check. The top half of the fraction identifies the location and district of the bank from which the check is drawn; the bottom half helps in routing the check.
PTS:1
ESSAY
66.ANS:
The Internal Revenue Service (IRS) is an agency of the Department of the Treasury. The main functions of the IRS are to collect income taxes and to enforce tax laws. The IRS also provides services to taxpayers. In local offices, IRS employees assist taxpayers in finding information and forms. The IRS prints pamphlets to aid taxpayers in preparing their returns. It also furnishes tax information and instruction booklets free to schools and colleges. The IRS maintains a web site where citizens can get tax information, download tax forms, and even file their taxes electronically.
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67.ANS:
An audit is an IRS examination of a taxpayer’s tax returns. Taxpayers being audited have three choices: (1) they can represent themselves; (2) they can give someone the power to take their place, as long as the designated person is a lawyer, certified public accountant, a member of the immediate family, or someone who is licensed to prepare tax returns; or (3) they can bring someone (tax preparer, attorney, or other representative) for support during the session.
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68.ANS:
An express contract is a legal agreement between two people that is oral or written. What makes it express is that the parties have stated the terms of their agreement in words. Examples include common legal agreements such as credit accounts, mortgage loans, and rental agreements.
By contrast, an implied contract is not written but is created by the actions or conduct of someone. The “terms” of an implied contract are assumed. For example, you may agree to wash your neighbor’s car for $10. This is an implied contract based on the actions of each person. Your neighbor accepts something of value (a clean car), knowing that you expect something of value in return (the $10). Although the terms of your agreement were never explicitly stated, it would be unfair or unjust if the neighbor did not pay you for washing her car.
PTS:1
69.ANS:
A checking account is a special type of bank account that allows you to write checks to make payments. A checking account offers several advantages: it provides a convenient way to pay your bills; writing a check is often safer than using cash, especially when making major purchases, paying bills, or buying through the mail; it has a built-in record keeping system that you can use to track expenses and create budgets; and it gives you access to other bank services, such as loans, online banking, and 24-hour access to your money through ATMs.
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70.ANS:
The best way to avoid fees is to choose the right kind of account. For example, if you need to write a large number of checks each month, sign up for an account that does not charge a per-check fee. Some accounts charge a fee for using a teller. Only sign up for such an account if you have your paycheck directly deposited by your employer and can do almost all your transactions online or by ATM. Shop around and find the account that is right for you. Be aware of the rules of your account, so that you don’t violate them, resulting in high fees. If your account requires a minimum balance, plan enough cushion so that your balance will not drop below that amount.
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