CYAF 222 Practice Questions with Verified
Correct Answers
A tax that requires a higher income person to pay a higher precentage of his/her income in
taxes is called a ___ tax whereas the ____ tax rate is the rate at which your last dollar
earned is taxed
progressive
marginal
Andrea is managing her finances and has an opportunity to earn some extra money
developing a webpage for a start-up business. The owners of the new business have agreed
to pay her $7,500 once the project has been completed. Andrea is in the 15% marginal tax
bracket this year but next year, after she gets married, she will be in the 25% marginal tax
bracket. If Andrea pushes to finish the project this calendar year, her estimated income tax
liability on the extra earnings will be $ ___
and if she takes longer and completes the work next calendar year (after January 1) her
estimated income tax liability on the extra earnings will be $___
.
1125
1875 (after Jan. 1st)
Invest now or later? Twins Barbara and Mary are both age 27. Beginning at age 27,
Barbara invests $2000 per year for ten years and then never sets aside another penny.
,Mary waits 10 years and then invests $2000 per year for the next 30 years. Assuming they
both earn 7 percent, how much will each twin have at age 67?
Step 1: Barbara starts investing $2000 annually for ten years and then stops. When
Barbara reaches age 37 she has accumulated $[___].
7739.3690
Perry Hajda had 4 credit cards in his billfold when his wallet was stolen. He reported the
cards missing as soon as he discovered the loss (after 2 days), but the following charges
were incurred before he reported the stolen cards:
$175--Kohl's
$150--Visa
$35--MasterCard
$120--Shell Fuel Card
How much is Perry's maximum legal liability for the fraudulent charges on these cards?
185.0000
A grace period is the time period in days during which deposits or withdrawals can be
made and still earn the same interest as other savings from a given day of the interest
period.
True
A low asset-to-debt ratio is a positive indicator of financial well-being.
, True
An ill-advised credit purchase can have negative effects on your budget for years.
True
Simone and Jake are a married couple filing their income taxes jointly. The have 4
dependent children, Conner (age 6), Lucy (age 10), Melinda (age 14), and Ben (age 16).
Based on the information provided below, their taxable income is $[ ].
Simone's total income is $60,000 but $5,000 qualify as exclusions
Jake's gross income is $54,000
Together, their adjustments total $9,000
Their itemized deductions total $10,500
The standard deductions for a married couple filing jointly is $11,400
Personal exemptions are $3,650 each
they are eligible for the Child Tax Credit which is $1,000 per qualifying child under the age
of 17
66700.00
You can always get more for your old car by trading it in for a new car rather than by
selling it on your own.
False
For children younger than age 18, the first $1,700 of unearned income (the income earned
from an investment) earned on custodial account assets is tax-free to the child.
Correct Answers
A tax that requires a higher income person to pay a higher precentage of his/her income in
taxes is called a ___ tax whereas the ____ tax rate is the rate at which your last dollar
earned is taxed
progressive
marginal
Andrea is managing her finances and has an opportunity to earn some extra money
developing a webpage for a start-up business. The owners of the new business have agreed
to pay her $7,500 once the project has been completed. Andrea is in the 15% marginal tax
bracket this year but next year, after she gets married, she will be in the 25% marginal tax
bracket. If Andrea pushes to finish the project this calendar year, her estimated income tax
liability on the extra earnings will be $ ___
and if she takes longer and completes the work next calendar year (after January 1) her
estimated income tax liability on the extra earnings will be $___
.
1125
1875 (after Jan. 1st)
Invest now or later? Twins Barbara and Mary are both age 27. Beginning at age 27,
Barbara invests $2000 per year for ten years and then never sets aside another penny.
,Mary waits 10 years and then invests $2000 per year for the next 30 years. Assuming they
both earn 7 percent, how much will each twin have at age 67?
Step 1: Barbara starts investing $2000 annually for ten years and then stops. When
Barbara reaches age 37 she has accumulated $[___].
7739.3690
Perry Hajda had 4 credit cards in his billfold when his wallet was stolen. He reported the
cards missing as soon as he discovered the loss (after 2 days), but the following charges
were incurred before he reported the stolen cards:
$175--Kohl's
$150--Visa
$35--MasterCard
$120--Shell Fuel Card
How much is Perry's maximum legal liability for the fraudulent charges on these cards?
185.0000
A grace period is the time period in days during which deposits or withdrawals can be
made and still earn the same interest as other savings from a given day of the interest
period.
True
A low asset-to-debt ratio is a positive indicator of financial well-being.
, True
An ill-advised credit purchase can have negative effects on your budget for years.
True
Simone and Jake are a married couple filing their income taxes jointly. The have 4
dependent children, Conner (age 6), Lucy (age 10), Melinda (age 14), and Ben (age 16).
Based on the information provided below, their taxable income is $[ ].
Simone's total income is $60,000 but $5,000 qualify as exclusions
Jake's gross income is $54,000
Together, their adjustments total $9,000
Their itemized deductions total $10,500
The standard deductions for a married couple filing jointly is $11,400
Personal exemptions are $3,650 each
they are eligible for the Child Tax Credit which is $1,000 per qualifying child under the age
of 17
66700.00
You can always get more for your old car by trading it in for a new car rather than by
selling it on your own.
False
For children younger than age 18, the first $1,700 of unearned income (the income earned
from an investment) earned on custodial account assets is tax-free to the child.
