AFC PREP CERTIFICATION EVALUATION EXAMS
2026 SOLVED QUESTIONS 100% CORRECT
◉ Definition of financial counseling. Answer: "The creative use of all
resources to obtain economic well-being for individuals and families."
◉ What are the goals of financial counseling? Answer: Help clients
resovle immediate problems
help them change ingrained problem behavior,
-Help client understand relationship between values, attitudes, emotions,
beliefs, self esteem and the conflicting portions of money management,
including spending, saving, borrowing and investing.
◉ financial security. Answer: your resources will cover NEEDS and
most of your WANTS.
◉ What is the purpose of the INITIATING stage of the counseling
process? How do you conduct it? Answer: To strive to build RAPPORT
with clients and to reduce TENSION clients may feel. To build trust;
-Smile, firm handshake, eye contact, small talk, good communication
Provide overview of process/set expectations
,-ethics, roles, confidentiality, responsibilities
Transition to exploring by asking purpose of visit.
◉ In the context of employee benefits, what is a cafeteria plan? Answer:
When employees choose from a menu of TAXABLE and TAX
REDUCING benefits.
◉ Why do employers offer employee benefits? Answer: 1. Increase
retention
2. Attract best talent
3. Save on taxes
◉ Define a marginal tax bracket. Answer: The rate at which your last
dollar is taxed
◉ Define a REGRESSIVE tax system. Who pays proportionally more in
this system? Answer: tax rate is the same for all. Lower income people
pay proportionally more in taxes.
◉ Explain the main points of creating AN ACTION PLAN in the goal
setting process. Answer: After selecting solutions, establish an action
plan
Implement and monitor
,◉ Explain the main points of BRAINSTORMING in the goal setting
process. Answer: Do not censor ideas
do not clarify
do not assign names
Use other people's ideas
◉ Explain the continuous debt method. What is the formula? Answer: If
you are unable to get completely out of debt (except mortgage) every 4
years, it means you rely on debt too heavily
◉ Explain the Fair Credit Reporting Act.. Answer: Allows Consumer to
challenge errors on their credit reports. Credit bureau must investigate
within 45 days
◉ What is the function of the Fair Debt Collection Practices Act? Who
does it apply to? Answer: Prohibits collectors from using abusive, unfair,
or deceptive practices
Applies only to debt collectors
◉ The _____ act requires that lenders disclose APR, Loan terms, and
total cost IN WRITING to the borrower. Answer: Truth in lending act
◉ Another name for a spending plan is _________? Answer: budget
, ◉ Which credit law, or act, gives all people an equal opportunity to
apply for loans, the law also protects against discrimination of race,
color, national origin, sex, religion, marital status, age, and public
assistace.. Answer: Equal credit opportunity act
◉ What is a flexible spending account? Answer: flexible spending
arrangement, it is an employer-sponsored account that allows employee-
paid expenses for medical or dependant care to be paid with an
emloyee's pre-tax dollars rather than after -tax income
◉ in the context of communication skills, what is EMPATHY? Why is
empathy important? Answer: Empathy is the ability to percieve and
understand what the client is experiencing
Empathy grows trust, which leads to goal achievement
1. emphatic understanding
2. emphatic expression
3. emphatic communication
◉ What is a money market account? Is it insured? Answer: A money
market account is a high-interest bearing deposit account that can offer
check writing and debit cards
Money-market accounts are not insured but are considered safe
2026 SOLVED QUESTIONS 100% CORRECT
◉ Definition of financial counseling. Answer: "The creative use of all
resources to obtain economic well-being for individuals and families."
◉ What are the goals of financial counseling? Answer: Help clients
resovle immediate problems
help them change ingrained problem behavior,
-Help client understand relationship between values, attitudes, emotions,
beliefs, self esteem and the conflicting portions of money management,
including spending, saving, borrowing and investing.
◉ financial security. Answer: your resources will cover NEEDS and
most of your WANTS.
◉ What is the purpose of the INITIATING stage of the counseling
process? How do you conduct it? Answer: To strive to build RAPPORT
with clients and to reduce TENSION clients may feel. To build trust;
-Smile, firm handshake, eye contact, small talk, good communication
Provide overview of process/set expectations
,-ethics, roles, confidentiality, responsibilities
Transition to exploring by asking purpose of visit.
◉ In the context of employee benefits, what is a cafeteria plan? Answer:
When employees choose from a menu of TAXABLE and TAX
REDUCING benefits.
◉ Why do employers offer employee benefits? Answer: 1. Increase
retention
2. Attract best talent
3. Save on taxes
◉ Define a marginal tax bracket. Answer: The rate at which your last
dollar is taxed
◉ Define a REGRESSIVE tax system. Who pays proportionally more in
this system? Answer: tax rate is the same for all. Lower income people
pay proportionally more in taxes.
◉ Explain the main points of creating AN ACTION PLAN in the goal
setting process. Answer: After selecting solutions, establish an action
plan
Implement and monitor
,◉ Explain the main points of BRAINSTORMING in the goal setting
process. Answer: Do not censor ideas
do not clarify
do not assign names
Use other people's ideas
◉ Explain the continuous debt method. What is the formula? Answer: If
you are unable to get completely out of debt (except mortgage) every 4
years, it means you rely on debt too heavily
◉ Explain the Fair Credit Reporting Act.. Answer: Allows Consumer to
challenge errors on their credit reports. Credit bureau must investigate
within 45 days
◉ What is the function of the Fair Debt Collection Practices Act? Who
does it apply to? Answer: Prohibits collectors from using abusive, unfair,
or deceptive practices
Applies only to debt collectors
◉ The _____ act requires that lenders disclose APR, Loan terms, and
total cost IN WRITING to the borrower. Answer: Truth in lending act
◉ Another name for a spending plan is _________? Answer: budget
, ◉ Which credit law, or act, gives all people an equal opportunity to
apply for loans, the law also protects against discrimination of race,
color, national origin, sex, religion, marital status, age, and public
assistace.. Answer: Equal credit opportunity act
◉ What is a flexible spending account? Answer: flexible spending
arrangement, it is an employer-sponsored account that allows employee-
paid expenses for medical or dependant care to be paid with an
emloyee's pre-tax dollars rather than after -tax income
◉ in the context of communication skills, what is EMPATHY? Why is
empathy important? Answer: Empathy is the ability to percieve and
understand what the client is experiencing
Empathy grows trust, which leads to goal achievement
1. emphatic understanding
2. emphatic expression
3. emphatic communication
◉ What is a money market account? Is it insured? Answer: A money
market account is a high-interest bearing deposit account that can offer
check writing and debit cards
Money-market accounts are not insured but are considered safe
