EMS Financial Literacy Practice Exam

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• What is net worth useful for?
• What effect do rising interest rates generally have on loan affordability and savings yields?
• What do banks do with the money people save with them?
• What was the traditional role of banks?
• Which term describes funds used to cover day-to-day operations?
• Budgeting helps with unplanned expenses and debt by doing what?
• What level of credit utilization is generally recommended for an optimal score?
• How would you determine if your disability income coverage is adequate for a paramedic's needs?
• Which of the following is an example of a non-current liability?
• What is start-up capital?
• What is the primary purpose of diversification in an EMS financial plan?
• What is a pension?
• Which statement describes a deficit?
• Which statement best defines savings?
• Which statement describes funds used to cover day-to-day operations? (Alternate wording)
• Which group would evaluate profitability to decide whether to continue or expand the partnership?
• What actions should you perform at least once a year to improve personal financial health?
• A pension fund is designed to do what after retirement?
• What are the two types of personal income?
• What is a high-deductible health plan (HDHP) and how does pairing with an HSA benefit you?
• Which is a primary reason to keep an emergency fund in liquid assets rather than stock investments?
• Which statement best describes the use of business savings?
• For a potential buyer, financial information helps determine what?
• Which retirement account uses after-tax contributions with tax-free withdrawals?
• Which item is NOT a capital cost?
• What is a recommended credit utilization ratio on revolving credit cards to maintain a strong score?
• Besides the date, which item is typically recorded on a source document?
• Which of the following summarizes the primary purpose of a budget?
• Assets include which items?
• Which statement about liability coverage in auto insurance is correct?
• A source document is defined as which of the following?
• Which option describes a bank’s income from loans?
• Why is it important to keep beneficiary designations up to date on retirement accounts and life insurance?
• Which statement about budgets is true?
• What is the difference between a deductible and a copayment in health insurance?
• What does government budgeting focus on?
• The primary use of financial records is to calculate profit and loss and communicate results to interested parties. True or False?
• What is a non-current asset?
• What is financial capital?
• If an investor has high risk tolerance, their portfolio will likely have more of which asset class?
• Loss is the amount by which which of the following occurs?
• What is the term used when a business makes money?
• Which group uses financial information to monitor day-to-day performance and make operational decisions?
• What is the term used when a business makes a loss?
• Which statement best defines assets?
• How often should you review your credit report for accuracy and why?
• What is business savings?
• Which considerations should EMS professionals evaluate before taking a side job that offers extra income?
• Fixed expenses are defined as?
• How does a Roth IRA differ from a Roth 401(k) in terms of contribution limits and employer involvement?
• Which option lists the five types of capital mentioned?
• Which group would negotiate wages and working conditions based on business financial information?
• Interest is defined as what?
• Which of the following is a current liability in personal finance?
• Assets are best described as which of the following?
• Which statement best describes budgeting for businesses?
• What are assets?
• Which components should be included when calculating total cost of ownership (TCO) for an EMS vehicle?
• What information on a W-4 should you update if you recently started a second EMS job with new income?
• Which of the following is an example of capital costs?
• How do you calculate debt-to-income (DTI) ratio and why is it used by lenders?
• What is a Health Savings Account (HSA) and what are three tax advantages it offers?
• Value Added Tax (VAT) is typically collected by which authority?
• Start-up expenses are defined as?
• Which statement about working capital is true?
• What is the purpose of forecasting in budgeting?
• What is the combined annual contribution limit to a traditional or Roth IRA for 2024, and is there a catch-up for ages 50+?
• What effect can an error on your credit report have, and what steps can fix it?
• Which statement best describes the effect of rising interest rates on borrowers and savers?
• Personal expenses are best described as which of the following?
• Fixed income is defined as which of the following?
• What factors determine how much tax is withheld from each paycheck?
• Should you invest your emergency fund in the stock market? Why or why not?
• Which item is included on a source document?
• Which description best defines business expenses?
• What is a power of attorney?
• If you borrow $200,000 at 5% annual interest for 30 years, approximately what is your monthly payment?
• How does contributing to a pre-tax retirement account affect net take-home pay?
• Which party determines if their investment in the business is profitable?
• Which of the following is an example of running costs?
• Which of the following is an example of business income?
• Which statement describes variable income?
• What are forecasts?
• Which statement best describes the relationship between investment fees and long-term growth?
• Share capital is invested by whom, and what is its purpose?
• Which combination of information is needed to estimate a fixed-rate mortgage payment?
• Operating expenses are defined as?
• Which term describes assets that can be converted to cash within one year?
• Which stakeholder's objective centers on profitability of the investment over the long term?
• Which item is an example of staff costs?
• Variable income is best described as which of the following?
• What annual steps help improve personal financial health by ensuring records are up-to-date?
• Which statement correctly describes the debt avalanche and debt snowball methods?
• If a two-person EMS household has a monthly take-home of 6,500 and wants to save 20% of take-home, how much should they allocate monthly to savings?
• Who is eligible to make catch-up contributions in retirement accounts?
• Which item would typically be classified as a non-current asset?
• How do you calculate net worth and why is it a useful metric?
• Which group uses financial information as a tool to negotiate salary and wage increases and better working conditions?
• What is a liability?
• Personal income is defined as which of the following?
• Which statement describes fixed income?
• How does a Health Flexible Spending Account (FSA) differ from an HSA?
• At age 50, what is the catch-up contribution amount for an IRA in 2024?
• Which of the following is a non-current liability in personal finance?
• If income is higher than expenditure, this is known as?
• Which three components make up most of a FICO credit score, and which factor has the largest impact?
• What is budgeting?
• Which statement is true about disability insurance for EMS professionals?
• Which option describes a bank’s income from investments?
• Business income refers to which of the following?
• What is the difference between tax credits and tax deductions?
• If you are nearing retirement, how should your asset allocation typically shift?
• Which group relies on financial information to assess the business's ability to repay loans and overdrafts?
• In EMS, what is the difference between short-term disability and workers' compensation?
• What is a Required Minimum Distribution (RMD) and when does it typically begin?
• What is a 529 plan and what is its primary purpose?
• Which purpose is served by preparing financial statements and communicating results to interested parties?
• What is the employer match concept and why is it important to contribute to receive the full match?
• What is diversification and why is it important in an EMS financial plan?
• Net worth is best described as which of the following?
• If EMS overtime pay is time-and-a-half, what is the hourly rate for a base wage of $28/hour after 10 overtime hours in a week?
• What are the two types of transactions?
• What is investment?
• Define compound interest and explain why starting early matters.
• What is fixed capital?
• What is the primary purpose of professional liability insurance for EMS professionals?
• Which type of capital is used for long-term physical assets like machinery?
• Which item is an example of operational costs?
• How does term life insurance differ from whole life insurance?
• If you begin a second EMS job with a different income, which W-4 details are most important to adjust?
• What does working capital consist of and what is it needed for?
• For someone with irregular overtime income, what is a prudent target for an emergency fund?
• For a worker aged 50+, what is the purpose of catch-up contributions in retirement accounts?
• When assessing a side job for extra income, which factor should be considered?
• Which of the following best describes current liabilities?
• Which stakeholders must ensure the business can pay its debts and is credit worthy?
• What is fixed capital used for?
• Which two categories dominate most EMS spending in a monthly budget?
• Which of the following is NOT an example of a transaction?
• A budget is best described as which of the following?
• What are two steps to protect your financial identity in EMS work settings?
• What is capital?
• What is one role of SARS related to VAT?
• Profit margin is defined as which of the following?
• When evaluating disability income coverage for a paramedic, which elements are essential to consider alongside the monthly benefit?
• Savings in a business are reserves of saved capital for what purpose?
• Which change is commonly recommended as you approach retirement?
• Which statement best describes budgeting for households?
• Savings refer to what in a business context?
• At what age can most workers claim Social Security retirement benefits, and how does delaying benefits affect monthly amounts?
• Financial records are used to do what?
• What does a deductible represent in health insurance?
• What is the Public Service Loan Forgiveness (PSLF) program and for whom is it intended?
• Variable expenses are defined as?
• Which of the following is NOT a type of capital?
• What does risk tolerance influence in portfolio construction?
• Which item would typically be classified as a current asset?
• Which item is contained in a source document?
• What is a current asset?
• How do people typically end up in debt?
• Which statement describes the Health Savings Account (FSA) use-it-or-lose-it rule within the plan year?
• Under current law, at what age do traditional IRAs/401(k)s typically require minimum distributions to begin?
• Which group uses day-to-day information about the business for problem solving?
• When would you typically use a power of attorney?
• Which statement is true about budgets?
• Which group would be most concerned with a positive profit trend when considering an acquisition?
• Profit is defined as which of the following?
• Which statement correctly describes fixed vs variable costs?
• Why is disability insurance important for EMS professionals?
• What statement is true about tax-advantaged accounts, specifically regarding Roth accounts?
• Creditors and suppliers rely on financial information to verify what?
• Which term describes money earned on money saved with a bank?
• Which statement about expense ratios and load fees is most accurate for long-term investment performance?
• Which of the following best describes the purpose of a monthly budget and the two categories that typically dominate EMS spending?
• In a tax-advantaged retirement plan, what is the main difference between traditional and Roth accounts?
• Which statement best describes the difference between buying a car with cash and financing with a loan?
• Which of the following best describes the make-up of a FICO score and the factor with the largest impact?
• Given a monthly gross income of 5,000, taxes of 1,000, and essential expenses of 1,200, what is the take-home amount available for savings?
• Which of the following defines a surplus?
• Which of the following is NOT typically included in total cost of ownership (TCO) for an EMS vehicle?