Ultimate Amortization Quiz
Don't let the chumps in the accounting department brag about their mad amortization skills. Show them who's the boss with our amortization quiz.
What was the original Old French meaning of the word "mortgage?"
- More money
- Death pledge
- Bad luck
Amortization allows a borrower to pay off which two parts of the home loan with one fixed monthly payment?
- Principal and interest
- Interest and term
- Principal and term
With amortization, if you pay $850 for your first mortgage payment, how much will you pay for your last mortgage payment?
Outside of mortgage lending, in what other financial field is amortization used?
- Investment banking
- Business accounting
- Antique appraisal
The first mortgages in America were introduced in what decade?
Before the Federal Housing Authority introduced the 30-year fixed mortgage, what percentage of American families were homeowners?
- 20 percent
- 40 percent
- 80 percent
If you have these three pieces of information about a mortgage loan, you can calculate the amortization table:
- Loan amount, annual interest rate and term of the loan
- Year of the loan, annual interest rate and size of the house in square feet
- Location of the house, loan amount and annual interest rate
Which of the following mortgage loans is considered "self-amortizing?"
- 30-year fixed mortgage
- 30-year adjustable rate mortgage
- 5-year adjustable rate mortgage
How many identical monthly mortgage payments will you make over the life of a 30-year fixed mortgage?
An amortization table shows what two importance pieces of information about each monthly mortgage payment?
- When the payment is due and when it is considered late
- The amount of the payment and how much it will increase the next month
- How much of the payment is principal and how much is interest
On a typical 30-year fixed loan, during what year of the amortization table does the borrower start paying back more principal than interest?
What is the total interest paid over 30 years on a $150,000 mortgage loan with an annual interest rate of five percent?
Depreciation and amortization are both generally accepted accounting principles of what accounting method?
- Accrual accounting
- Cash accounting
- Debit accounting
Which of the following statements most accurately describes accrual accounting?
- A popular method of accounting for very small businesses.
- A method of accounting in which income and expenses are reported when sales or purchases are made, not when the cash actually changes hands.
- Technically illegal, it's a method of accounting used by only the most "creative" organizations.
Which of the following business expenses would NOT be covered by depreciation?
- Office equipment
- Delivery vans
The legal life of a patent is how many years?
- 7 years
- 17 years
- 27 years
Which of the following business expenses CANNOT be amortized for tax purposes?
- Brand names
- Life insurance
Which of the following items is NOT typically included on a company's annual balance sheet?
What is the accounting term for a business expense that is higher than the fair market value of the asset?
The "amortization of intangibles" is covered in what section of the U.S. tax code?
- Section 197
- Section 13,457
- Trick question; there is no such section