H&R Block Budget Challenge UPDATED
Exam Questions and CORRECT Answers
Auto insurance - CORRECT ANSWER - A type of insurance used by vehicle owners to
cover costs associated with car accidents.
Budget - CORRECT ANSWER - A chart that documents how much money an individual
earns and spends.
Cash Flow - CORRECT ANSWER - The relationship between income and expenses in a
budget. For example, if you spend more money than you have coming in, you have negative cash
flow.
Certificate of Deposit (CD) - CORRECT ANSWER - A savings vehicle offered through
banks with a set maturity date. For example, if you put $5,000 into a five-year CD, you cannot
withdraw the money until the five year maturity date without facing penalties. However, interest
rates are usually higher in CDs than traditional savings accounts making them desirable for long
term savings.
City Income Tax - CORRECT ANSWER - Money collected by some city governments to
be used for city public services, such as side walks and city water systems.
Credit - CORRECT ANSWER - The ability to purchase goods or services with the
promise to pay for them at a later time.
Creditworthiness - CORRECT ANSWER - Demonstrating trust in repayment of borrowed
money.
Credit Card - CORRECT ANSWER - A plastic card that allows an individual to make a
purchase on credit.
Exam Questions and CORRECT Answers
Auto insurance - CORRECT ANSWER - A type of insurance used by vehicle owners to
cover costs associated with car accidents.
Budget - CORRECT ANSWER - A chart that documents how much money an individual
earns and spends.
Cash Flow - CORRECT ANSWER - The relationship between income and expenses in a
budget. For example, if you spend more money than you have coming in, you have negative cash
flow.
Certificate of Deposit (CD) - CORRECT ANSWER - A savings vehicle offered through
banks with a set maturity date. For example, if you put $5,000 into a five-year CD, you cannot
withdraw the money until the five year maturity date without facing penalties. However, interest
rates are usually higher in CDs than traditional savings accounts making them desirable for long
term savings.
City Income Tax - CORRECT ANSWER - Money collected by some city governments to
be used for city public services, such as side walks and city water systems.
Credit - CORRECT ANSWER - The ability to purchase goods or services with the
promise to pay for them at a later time.
Creditworthiness - CORRECT ANSWER - Demonstrating trust in repayment of borrowed
money.
Credit Card - CORRECT ANSWER - A plastic card that allows an individual to make a
purchase on credit.
