This quiz works best with JavaScript enabled. Home > Taxation > Income Tax Planning > Income Tax Planning – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Tax Planning Quiz 15 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If you are concerned about your investment losing money instead of appreciating, then you are worried about ..... risk. A) Market. B) Inflation. C) Fraud. D) Financial. Show Answer Correct Answer: A) Market. 2. Which of these is not a term for someone living in a rented space? A) Renter. B) Tenant. C) Homeowner. D) None of above. Show Answer Correct Answer: C) Homeowner. 3. The competence or legal ability of a person to enter a contract is ..... A) Consideration. B) Legality. C) Contractual capacity. D) Agreement. Show Answer Correct Answer: C) Contractual capacity. 4. Why do people invest when risk is involved? A) Because they do not understand that investing is risky. B) Because the talk about risk is really overstated; investing is a safe bet. C) Because the potential to make money is greater than the risk of losing it. D) Because they are greedy and believe they can beat the odds to become a millionaire. Show Answer Correct Answer: C) Because the potential to make money is greater than the risk of losing it. 5. Someone who, individually or as a member of a company, operates an establishment for the deposit or loan of money. A) Financial Planner. B) Banker. C) Loan Officer. D) Insurance Agent. Show Answer Correct Answer: B) Banker. 6. Which is a flexible expense A) Rent. B) Mortgage. C) Car payment. D) Gasoline. Show Answer Correct Answer: D) Gasoline. 7. If you are looking to use good debt build equity, which of the following would you purchase? A) A boat. B) A car. C) A house. D) An RV. Show Answer Correct Answer: C) A house. 8. ..... expenses are costs that do not change from month to month. A) Variable. B) Fixed. C) Conditional. D) Regular. Show Answer Correct Answer: B) Fixed. 9. A series of regular payments made to a retired worker under an organized plan. A) Pension. B) Financial plan. C) Personal assets. D) None of above. Show Answer Correct Answer: A) Pension. 10. Which of the following should an emergency fund be used to pay for? A) Monthly bills. B) New boat. C) College classes. D) Car repairs. Show Answer Correct Answer: D) Car repairs. 11. What do financial planning skills ultimately enable an individual to do? A) To prepare for the future. B) To process their own tax returns. C) To stop spending. D) To become wealthier without saving money. Show Answer Correct Answer: A) To prepare for the future. 12. When preparing a budget, focus mostly on you A) Gross income. B) Disposable income. C) Taxable income. D) Net income. Show Answer Correct Answer: B) Disposable income. 13. Which of the following is a characteristic of a Roth IRA? A) Money invested into a Roth is "after-tax" dollars. B) Money is deposited into a Roth by your employer. C) Money invested into a Roth is "before-tax" dollars. D) Once money is deposited into a Roth IRA, it cannot be taken out until retirement. Show Answer Correct Answer: A) Money invested into a Roth is "after-tax" dollars. 14. When investing, the basic rule is this:The GREATER the potential to gain higher earnings, the A) Higher the level of risk. B) Lower the level of risk. C) Greater the potential for fraud. D) Less likely you are to invest. Show Answer Correct Answer: A) Higher the level of risk. 15. The financial planning process consists of ..... steps A) 5. B) 6. C) 3. D) None of above. Show Answer Correct Answer: B) 6. 16. Most experts recommend saving ..... % of your disposal income each pay period A) 10. B) 20. C) 30. D) 50. Show Answer Correct Answer: A) 10. 17. Those things that are basic and necessary for a decent quality of life A) Want. B) Value. C) Needs. D) None of above. Show Answer Correct Answer: C) Needs. 18. The BEST way to protect yourself from fraud risk is to A) Invest only with reputable companies. B) Ask your friends for suggestions before investing. C) Keep your money is a savings account at a local bank. D) Invest heavily in jewelry and gold. Show Answer Correct Answer: A) Invest only with reputable companies. 19. There are four steps in solving one's personal financial challenges:1. considering opportunity costs2. assessing risks and returns3. setting short-and long-term goals4. assessing needs and wantsWhich of these is the correct order of these steps? A) 2, 1, 3, 4. B) 1, 2, 3, 4. C) 4, 1, 2, 3. D) 4, 2, 3, 1. Show Answer Correct Answer: C) 4, 1, 2, 3. 20. Putting money to use that you hope will increase its value over time is called: A) Investing. B) Net worth. C) Average rate of return. D) Compound interest. Show Answer Correct Answer: A) Investing. ← PreviousNext →Related QuizzesTaxation QuizzesIncome Tax Planning Quiz 1Income Tax Planning Quiz 2Income Tax Planning Quiz 3Income Tax Planning Quiz 4Income Tax Planning Quiz 5Income Tax Planning Quiz 6Income Tax Planning Quiz 7Income Tax Planning Quiz 8Income Tax Planning Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books