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FCS 340 Exam 3 | Actual Exam Questions | 100% Correct Answers | Verified 2024 Version, Exams of Financial Accounting

FCS 340 Exam 3 | Actual Exam Questions | 100% Correct Answers | Verified 2024 Version

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2024/2025

Available from 05/13/2025

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FCS 340 Exam 3 | Actual Exam Questions |
100% Correct Answers | Verified
2024 Version
Traditional financial guidelines suggest that your home should cost about __________ times your annual
income - ✔✔20-30%
List advantages and disadvantages of renting - ✔✔Advantages: Easy to move, financial benefits, lifestyle
flexibility
Disadvantages: No tax benefit, limitations on remodeling, restrictions on pets
The opportunity to have another person take over rent payments and live in the rental unit is called
__________________________. - ✔✔Subletting
List advantages and disadvantages of buying a home. - ✔✔Advantages: Pride of ownership, financial
benefits, lifestyle flexibility
Disadvantages: Financial commitment, higher living expanses, limited mobility
List important factors to consider when selecting a contractor to build a home. - ✔✔Contractor
reputation
Experience
Payment schedule
Timeline of building
In order to purchase a home, most people need to save for a _______________________ before
purchasing - ✔✔downpayment
List important considerations in choosing a home to purchase - ✔✔Move-in ready
Fixer upper
School district
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Download FCS 340 Exam 3 | Actual Exam Questions | 100% Correct Answers | Verified 2024 Version and more Exams Financial Accounting in PDF only on Docsity!

FCS 340 Exam 3 | Actual Exam Questions |

100% Correct Answers | Verified

2024 Version

Traditional financial guidelines suggest that your home should cost about __________ times your annual income - ✔✔ 20 - 30% List advantages and disadvantages of renting - ✔✔Advantages: Easy to move, financial benefits, lifestyle flexibility Disadvantages: No tax benefit, limitations on remodeling, restrictions on pets The opportunity to have another person take over rent payments and live in the rental unit is called __________________________. - ✔✔Subletting List advantages and disadvantages of buying a home. - ✔✔Advantages: Pride of ownership, financial benefits, lifestyle flexibility Disadvantages: Financial commitment, higher living expanses, limited mobility List important factors to consider when selecting a contractor to build a home. - ✔✔Contractor reputation Experience Payment schedule Timeline of building In order to purchase a home, most people need to save for a _______________________ before purchasing - ✔✔downpayment List important considerations in choosing a home to purchase - ✔✔Move-in ready Fixer upper School district

How much you can afford What should a home buyer consider when evaluating the actual house? - ✔✔Zoning laws School systems Future construction around you Property values in area What does the real estate agent do? - ✔✔Help sell or buy real estate When buying an older house, a buyer should get a ____________________ to find out about possible problems with the house. - ✔✔Inspector After submitting an offer on a house, the seller may choose to provide a________________, rejecting the submitted offer. - ✔✔counteroffer What is a contingency clause? - ✔✔Agreement is good only if certain events happen What is an appraisal? Why does the mortgage company conduct an appraisal? - ✔✔-Assessing something.

  • So they can know how much they should lend you. What is earnest money? - ✔✔Portion of price of home that buyer deposits as evidence of good faith to indicate serious purchaser. Define points. - ✔✔Prepaid interest charged by lender What is PMI? When is a buyer required to purchase it? - ✔✔-Property mortgage insurance
  • When downpayment is less than 20%

If you choose to avoid the risk of a traffic accident by not driving to work, you are using risk _______________________. - ✔✔Risk avoidance If you choose to wear your seatbelt, you are using risk __________________________. - ✔✔Risk reduction Liability is defined as: - ✔✔Legal responsibility for cost of another persons losses or injuries. What is typically covered in homeowner's insurance? - ✔✔-Building you live in and other structures on property

  • Additional living expanses
  • Personal property
  • Personal liability and related coverage
  • Specialized coverage The best place to keep a household inventory is in a ______________________________. - ✔✔Safe deposit box How can you document a household inventory? - ✔✔Pictures, videos, write it down Insurance that covers valuable items, such as an expensive harp, is called _________________________ floater. - ✔✔Personal property floater Personal property insurance covers personal property items up to ___________________% of the insured value of the home. - ✔✔55%, 70%, 75% A policy that supplements your basic personal liability coverage is called an _____________________ policy. - ✔✔Umbrella policy What does the home insurance medical payments coverage cover? - ✔✔Minor accidental injuries to visitors on your property

How can you be covered in case of a flood? - ✔✔Flood insurance How do you determine how much coverage you need for your house? - ✔✔How much it will cost to rebuild your house Megan is contacting several insurance companies to compare coverage for her home. What factors could affect her premiums? - ✔✔Location of home Type of structure Sarah was contacted by her home insurance agent to discuss ways to decrease her premium. What could she do to decrease her premium? - ✔✔-Raise deductible

  • Improve security
  • Maintain good credit
  • Make more disaster resistance Delaney had permission from Cody to borrow his car to run some errands. Unfortunately, while Delaney was driving, she looked down to change songs on her iPhone and sideswiped a car and hit a bicyclist. Would Delaney's automobile insurance help her in this situation? If so, how? - ✔✔Yes Lauren had a severe allergy attack and crashed her car into a telephone pole while sneezing. The damage to the telephone pole would be covered under Lauren's ________________________________________________policy. - ✔✔Property damage liability . Micah has an old beater car and wants to keep her insurance costs down. In order to minimize the financial impact of an accident she may cause, she should, at a minimum, carry which type of insurance?
  • ✔✔Property damage liability Kristen lived in a neighborhood that was known for gang activity. One day, she noticed that her car had been vandalized. This damage would be covered under her_________________________________________policy. - ✔✔Comprehensive physical damage

What is coinsurance? - ✔✔a type of insurance in which the insured pays a share of the payment made against a claim. a type of insurance in which the insured pays a share of the payment made against a claim. - ✔✔Assigned benefits This health insurance provision sets limits on the amount of repayment for certain services is called ________________________________. - ✔✔Internal limits

. A policy that pays you back for actual expenses is called a ______________________ plan. - ✔✔Hospital indemnity policies After you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. This is called - ✔✔Out of pocket limit What are the major differences between a health maintenance organization (HMO) and a preferred provider organization (PPO)? - ✔✔HMO- Provides services for a fixed, prepaid monthly min. PPO- Group of doctors who agree to provide health care at rates approved by insurer. Karli contributes pretax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have? - ✔✔Flexible spending account . Individuals over the age of 65 who are eligible for federal government health plan coverage may also be interested in purchasing more coverage called ________________________. - ✔✔Medigap If you are concerned that your disability insurer may try to cancel your coverage if your health becomes poor, you should look for a plan that offers _____________________________. - ✔✔Premium disability benefit

A person who is named to receive the benefits from an insurance policy is a _______________________________. - ✔✔Beneficiary Why do people buy life insurance? - ✔✔-Pay off home mortgage

  • Provide education for children
  • Make charitable donations after death What type of household most likely has the greatest need for life insurance? - ✔✔Household with children Expain the following methods of determining life insurance needs. a. Easy method b. Dual income, no kids method c. Nonworking spouse method d. Family needs method - ✔✔Easy method- Need 70% of salary for seven years Dual Income, no kids- Insure spouse will not be unduly burdened by debts should you die. Nonworking spouse method- Amount money needed until child reaches 18 Family needs method- What all does your family need if you die Another name for temporary life insurance is _________________. - ✔✔Term life insurance Another name for permanent life insurance is _____________________. - ✔✔Whole life insurance . If you want to purchase term insurance, what will you will receive - ✔✔Life insurance for certain amount of time What is a renewable term policy? A conversion term policy? - ✔✔Renewable- Once one terms ends. You can continue it. Conversion- Allows you to change from term to permanent.

b. Limited installment payment. c. Life income option. d. Proceeds left with the company. - ✔✔Lump sum- Pays face amount of policy in one installment. Limited installment- Provides payments in equal installments for certain amount of years. Life income option- Payments are made as long as beneficiary lives. Proceeds left w/ the company- Left w/ insurance company at specified rate of interest. Explain the following annuities: a. Fixed annuity b. Variable annuity c. Index annuity - ✔✔-Fixed annuity- The annuitant will receive fixed amount of income over certain period.

  • Variable annuity- Monthly payments may vary bc they are based on income received from stocks & other investments.
  • Index annuity- Has earnings that aciculate at rate base on formula . It is better to fund an IRA, Keogh, or 401(k) before buying an __________________. - ✔✔Annuities What is copayment provision? How is it different from coinsurance? - ✔✔Copayment- Set amount to pay Coinsurance- Insurance pays a share amount of the payment made against the claim.