True/False
Indicate whether the sentence or statement is true or
false.
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| 1. | All credit cards have an annual
fee.
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| 2. | Capital refers to the value of
the borrower’s assets.
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| 3. | If you lose your bank credit
card and you report it immediately to the credit card company, you are only liable for $500 of what
someone might charge on it.
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| 4. | There are five major credit
bureaus that keep track of your credit information in this country.
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| 5. | When making a purchase using
Installment Sales Credit, you normally make a down payment for the item or service being
purchased.
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| 6. | An Open Charge Account is an
account where purchases can be charged at any time but at least part of the debt must be paid each
month.
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| 7. | If you don’t have the
money to make a large purchase and won’t have it for many months, a credit card is your best
way to use credit as it is convenient and generally the credit card company charges a low interest
rate.
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| 8. | It is recommended that you get
a copy of your credit report from the different credit bureaus once a year so you can check your
credit record and make sure no one is using your personal information to make charges and thus hurt
your credit rating.
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Multiple
Choice
Identify the letter of the choice that best completes the statement or answers the
question.
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| 9. | Anyone who buys on credit or
receives a loan is known as a...... a. | debtor | b. | creditor | c. | character | d. | credit
references | | | | | | | | |
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| 10. | Which is not a type of credit
as discussed in class? a. | loan
credit | b. | trade credit | c. | charge credit | d. | sales credit | | | | | | | | |
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| 11. | Anyone who sells on credit or
makes a loan is known as a..... a. | debtor | b. | creditor | c. | character | d. | credit reference | | | | | | | | |
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| 12. | Which type of credit is used by
a business when it receives goods from a wholesaler and pays them at a later specified
date? a. | loan credit | b. | trade credit | c. | charge
credit | d. | budget credit | | | | | | | | |
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| 13. | Which is not considered to be
one of the three ‘C’s’ of credit? a. | capacity | b. | character | c. | capital | d. | compliancy | | | | | | | | |
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| 14. | Credit
is...... a. | the money paid for the use of money. | b. | a business or individual from whom you have received loans in the
past. | c. | the planned protection provided by sharing economic
loss. | d. | the privilege of using someone else’s money for a period of
time. | | |
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| 15. | When looking at the three
‘C’s’ of credit, which one refers to your ability to pay a debt when it is
due? a. | capacity | b. | character | c. | capital | d. | compliancy | | | | | | | | |
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| 16. | Which of the following is NOT a
benefit of credit for the consumer? a. | you don’t have to carry lots of cash
on your person | b. | allows you to have immediate possession of the item you
want | c. | tend to purchase more on credit than if you had to write a check or
pay in cash | d. | allows you to buy an item when it goes on sale for potential
savings | | |
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| 17. | Which of the following is NOT a
problem of credit for the consumer? a. | credit use hurts your credit record so you
shouldn’t use it any more than you have to. | b. | overuse of credit can result in too much being owed | c. | careless buying may result if you become lazy in your
shopping | d. | higher prices may be paid because some businesses will charge more if
a purchase is made on credit | | |
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| 18. | Which is not a type of charge
account? a. | open | b. | budget | c. | revolving | d. | bank | | | | | | | | |
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| 19. | The additional amount you must
pay for using credit is.... a. | interest | b. | finance
charge | c. | application fee | d. | usage fee | | | | | | | | |
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| 20. | Credit cards that can only be
used at certain stores and are company specific are called.... a. | bank charge cards | c. | retail store cards | b. | travel & entertainment cards | d. | VISA &
Mastercard | | | | |
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| 21. | American Express credit cards
are classified as a.... a. | bank charge
card | c. | oil company credit card | b. | travel &
entertainment | d. | retail store credit card | | | | |
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| 22. | When is installment sales
credit typically used? a. | when purchasing
utilities | b. | when purchasing electricity only | c. | when purchasing furniture & household appliances | d. | when purchasing groceries | | |
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| 23. | Which is a type of loan
discussed in class? a. | single-payment
loan | c. | monthly-payment loan | b. | long-term
loan | d. | sales loan | | | | |
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| 24. | Which law/act requires prompt
correction of billing mistakes when they are brought to the attention of a business in a prescribed
manner? a. | Truth in Lending Law | c. | Fair Credit Reporting
Act | b. | Equal Credit Opportunity Act | d. | Fair Credit Billing
Act | | | | |
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| 25. | A credit bureau does
what? a. | keeps track of your credit record for you | b. | keeps track of your credit record and provides that information to your
employer | c. | keeps track of your credit record and sells that information to credit
gathers | d. | all of these are correct | | |
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| 26. | What law/act requires that you
be told the cost of a credit purchase in writing before you sign a credit agreement? a. | Equal Credit Opportunity Act | c. | Fair Credit Reporting
Act | b. | Truth in Lending Law | d. | Fair Credit Billing
Act | | | | |
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| 27. | A report that shows the debts
you owe, how often you use credit, and whether you pay your debts on time is known as
a..... a. | finance report | b. | bank
record | c. | credit report | d. | credit bureau | | | | | | | | |
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Completion
Complete each sentence or statement.
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| | 28. | This word refers to your
honesty and willingness to pay a debt when it is due. (spell your one-word answer correctly and do
not capitalize)
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| | 29. | When a consumer charges a
purchase at the time they buy the good or service, it is known as ____________ credit. (spell
your one-word answer correctly and do not capitalize)
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| | 30. | One type of loan is one in
which you agree to make monthly payments in specified amounts over a period of time, with each
payment known as a ______________. (spell your one-word answer correctly and do not
capitalize)
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