People Slip Up in Building and Maintaining Good Credit When

question 11

Multiple Choice

People slip up in building and maintaining good credit when they

• A)pay more than 14 percent of disposable income toward non-mortgage debt payments.
• B)save over long periods of time.
• C)make on-time payments on credit cards.
• D)regularly check the accuracy of credit bureau files.

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Definitions:

Net Book Value

The value of an asset as recorded on the balance sheet, calculated as the original cost minus accumulated depreciation and impairments.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an equal annual amount.

Depreciable Cost

The cost of a fixed asset minus its salvage value, which is the total amount that can be depreciated over its useful life.

Initial Cost

The amount of money spent to acquire or start up an asset or investment, excluding any subsequent costs for maintenance or operation.