Deca Financial Analysis Updated Actual Questions With Correct Answers

DECA FINANCIAL ANALYSIS UPDATED ACTUAL
QUESTIONS WITH CORRECT ANSWERS
Question 1.
Explain forms of financial exchange (cash, credit, debit, electronic funds transfer, etc.) (PQ)

ANSWER
Credit enables a business or individual to purchase goods and services in exchange for a promise to
pay later. Debit is a variation of credit. Layaway means removing merchandise from stock and
keeping it in separate storage area until the customer pays. An on-approval sale is an agreement
permitting customers to take merchandise home for future consideration before buying. A Cash On
Demand sale is a transaction that occurs when customers pay for goods at the time they are
delivered.



Question 2.
Identify types of currency (paper money, coins, banknotes, government bonds, treasury notes,
etc) (PQ)

ANSWER
Currency is tokens used as money in a country. - Paper money: money in liquid form - Banknotes:
promissory notes issued by banks - Government bonds - Treasury notes: debt obligation issued by
government



Question 3.
Describe functions of money (medium of exchange, unit of measurement, store of value) (PQ)

ANSWER
Money functions as a vehicle to pay for purchases, save for future, and build wealth. Also used for... -
government services - savings - investments



Question 4.
Describe sources of income (wages/salaries, dividends, transfer payments, etc.) (PQ)

ANSWER
The primary source of income is the wages or salary earned from an employer. Other sources are
tips, gifts of money, interest



Question 5.
Explain the time value of money (CS)

ANSWER
The time value of money is the increase of an amount of money due to interest earned over time or
dividends paid. Interest is the money you earn over time as a percentage of the original amount of
money. *Use some equations from algebra to spice it up*




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, Question 6.
Explain the purpose and importance of credit (CS)

ANSWER
Credit allows business or individuals to obtain products for a promise to pay later. Credit makes it
possible for millions of people and companies to purchase goods and services who otherwise would
not have the means to do so. Extending credit provides a purchasing incentive to customers which
enhances sales revenue and the overall economy.



Question 7.
Explain legal responsibilities associated with financial ex- changes (CS)

ANSWER
In legal terms, a sale is a contract in which ownership of goods transfers from the seller to the buyer
for a cost. According to the UCC, goods are tangible movable property. Payment occurs when the
buyer delivers the agreed price and the seller accepts it The receipt of goods is when the buyer takes
physical possession of the goods A court may find that a contract is unfair to one party, in such case,
the contract may be voided or limited.



Question 8.
Explain the nature of financial lege, retirement, wills, insurance, etc) (CS)

ANSWER
- Need to prioritize needs over wants - Keep in mind opportunity costs - Consider liquidity



Question 9.
Set financial goals (CS)

ANSWER
Financial goals are influences by two main factors:
- the time frame in which you want to achieve goals - the type of need that inspires your goals Goals
can be... - short term (one year or less) - intermediate (two-five years) - long term (more than 5
years)



Question 10.
Develop personal budget (CS)

ANSWER
A personal budget is a plan for saving and spending your money based on your income and expenses.
A personal budget should - define your goals - prioritize - estimate income and expenses - create
budget




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