AnswersGA-GSE Personal Finance and EconomicsUnderstanding Net Worth

Understanding Net Worth — Unit test Answers

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Patrick has assets that total $9,500. His liabilities total $1,900. Which expression will find Patrick’s net worth?

A
9,500 dollars divided by 1,900 dollars
Option A
B
1,900 dollars minus 9,500 dollars
Option B
C
1,900 dollars minus 9,500 dollars
Option C
D
9,500 dollars minus 1,900 dollars
Option D
2
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Rosetta listed her assets and liabilities on a personal balance sheet. Rosetta’s Balance Sheet (April 2013)AssetsLiabilitiescash$900credit card$4,000investments$1,100student loan$2,000 house$150,000mortgage$100,000car$8,000car loan$5,000Total Total If Rosetta sells her house and pays off the mortgage, how much should she receive (assuming there are no other costs associated with selling the house)?

A
$42,000
B
$50,000
C
$52,000
D
$60,000
3

Aisha’s income statement for the month of June is shown. Which expression will find Aisha’s net income for June?

Question illustration
A
2,700 dollars divided by 1,300 dollars
Option A
B
1,300 dollars minus 2,700 dollars
Option B
C
1,300 dollars + 2,700 dollars
Option C
D
2,700 dollars minus 1,300 dollars
Option D
4

Dante listed his assets and liabilities on a personal balance sheet. Dante’s Balance Sheet (August 2013)AssetsLiabilitiescash$900credit card$4,000investments$1,100student loan$1,000house$150,000mortgage$100,000car$8,000car loan$5,000Total Total Which statement is true about the value of Dante’s assets and liabilities?

A
He has $50,000 more in assets than in liabilities.
B
He has $50,000 more in liabilities than in assets.
C
He has $110,000 more in liabilities than in assets.
D
He has $160,000 more in assets than in liabilities.
5

Mr. Morgan earns $38,000 a year as a salesperson and a 5% commission on all his sales. He has a mortgage of $910 a month and pays $175 a month for utilities. Mr. Morgan owns a rental property for which he receives $680 per month.Which is a liability?

A
the yearly salary
B
the commission
C
the mortgage
D
the rental property
6

This graph shows student loan debt in the United States from 1994 to 2009.

Question illustration
A
Student loan debt will most likely decrease in the coming years.
B
Students have taken out higher and higher loans since 1994.
C
Enrollment for higher education will soon begin to decrease.
D
Tuition for higher education has risen steadily since 1994.
7

The 1040 form is used to record

A
state tax.
B
local tax.
C
federal tax.
D
sales tax.
8

Which results are more likely for someone without personal finance skills? Select three options.larger long-term credit or loan costsless preparation for emergenciesfewer utility expensessimple long-term investment strategiesincreased long-term challenges

A
larger long-term credit or loan costs
B
less preparation for emergencies
C
fewer utility expenses
D
simple long-term investment strategies
E
increased long-term challenges
9

Error

Answer not available
10

Roberto listed his assets and liabilities on a personal balance sheet. Roberto’s Balance Sheet (September 2013)AssetsLiabilitiescash$1,800credit card$4,000investments$6,200personal loan$1,000house$150,000mortgage$100,000car$8,000car loan$5,000Total Total After creating the balance sheet, Roberto decided to use his investments to pay off his car loan. How will that decision affect the difference between his assets and liabilities?

A
It will make the assets $5,000 less than the liabilities.
B
It will make the assets $5,000 more than the liabilities.
C
The difference between the assets and the liabilities will remain the same.
D
The difference between the assets and the liabilities cannot be compared.
11

The diagram shows revenue from federal income taxes.

Question illustration
A
The most revenue comes from individual and payroll taxes.
B
The least revenue comes from individual and corporate taxes.
C
The most revenue comes from payroll and corporate taxes.
D
The least revenue comes from payroll and other taxes.
12

Read the scenario.Sarah has always been passionate about environmental protection. She decides to volunteer her time and donate to a local organization dedicated to cleaning up parks and promoting recycling in her community. She feels a sense of fulfillment knowing that her efforts are contributing to a cleaner and healthier environment for future generations.What is the primary motivation behind Sarah's volunteer work and donations?

A
to spend more time outdoors in local parks
B
to gain recognition and status in her community
C
to earn tax credits for her charitable contributions
D
to fulfill a personal sense of environmental responsibility
13

Omar’s income statement for the month of October is shown. What is Omar’s net income for October?

Question illustration
A
$1,000
B
$1,500
C
$2,500
D
$3,500
14

This chart shows Dan’s budget:

Question illustration
A
Yes, Dan spent as much as he earned.
B
No, Dan should lower his savings account contribution.
C
Yes, Dan used his savings to cover extra expenses.
D
No, Dan should reduce his discretionary spending.
15

Which interest could best help someone become an athletic trainer?

A
enjoying working with aircraft
B
understanding sports injuries
C
wanting to manage workers
D
enjoying working with food
16

A federal payroll tax that supports retired workers is

A
progressive tax.
B
sales tax.
C
corporate tax.
D
social security tax.
17

Error

Answer not available
18

Julio has a house worth $220,000. He has a $175,000 mortgage. Julio says that in this situation, his asset equity is really only $45,000. Which statement explains whether Julio is correct?

A
Julio is correct because the $45,000 equity in the house is the real asset.
B
Julio is correct because he can pay $45,000 and have no more liabilities.
C
Julio is not correct because the same item cannot represent both an asset and a liability.
D
Julio is not correct because the house cannot be worth more than the mortgage.
19

Which of these is the best example of an asset?

A
the electricity in a home
B
the antique diamond necklace someone is wearing
C
the coffee someone drank this morning
D
an old, used airline ticket
20

Amanda wants to buy a new car. What questions of financial responsibility should she ask herself before she makes the purchase? Select three options.

A
Do I need this car or should I walk, bike, and take the bus to save money?
B
Is this a reliable vehicle or will I have to make costly repairs?
C
What will my friends think when I buy this car?
D
Will I be able to afford the insurance, gas, maintenance of battery, oil, tires, and also repairs?
E
Will this new car be fast and my favorite color?

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