Suppose That You Just Completed Your First Year of College

question 37

Multiple Choice

Suppose that you just completed your first year of college with $11,000 in loans and plan to borrow the maximum each year from now until graduation. You have never accounted for the way you spend your money, do not have a budget, and want to insure that you will be able to repay your loans after college. What is the most important thing you can do right now?

• A) Talk to your parents about an allowance.
• B) Visit your career counselor at school.
• C) Ask a friend who took the Personal Finance course for advice.
• D) Immediately begin to develop a personal financial plan.

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Definitions:

Straight-Line

A technique for computing depreciation or amortization that involves uniformly distributing an asset's cost across its lifespan.

Assets

Resources owned by a person or entity that are expected to provide future economic benefits.

Depreciation Expense

An accounting method that allocates the cost of tangible asset over its useful life, reflecting how the asset loses value over time.

Accumulated Depreciation

The total depreciation of an asset up to a specific point in time, reflecting wear and tear or obsolescence.