A system for keeping track of money, a way to keep you from spending more money than you earn, and a way to help you save for the future.

The correct equation for pay is... Options: Deductions - Gross Pay = Net Pay, Gross Pay - Deductions = Net Pay, Net Pay - Deductions = Gross Pay

Gross Pay - Deductions = Net Pay

A key difference between commercial banks and credit unions is that:

Commercial banks are ‘for‐profit’ and credit unions are ‘not‐for‐profit’.

Which aspect of security at a depository institution is NOT TRUE? Options: Depository institutions have insurance protection for up to $250,000 per depositor per account type. If something happened to the money in the bank, you would get the value of your account back as long as the deposited amount was no more than the insurance limit., All money stored at a depository institution is kept safe at all times by numerous security measures., Information about depositors and their accounts is kept in secure data storage., Depository institutions have insurance protection. Depositors can have multiple accounts insured at the same depository institution as long as each account has no more than $100,000.

Depository institutions have insurance protection. Depositors can have multiple accounts insured at the same depository institution as long as each account has no more than $100,000.

Sanjay is concerned about the safety of the money in his savings account. Which type of depository institution should he choose? Options: A commercial bank, since his deposits would be insured by the Federal Deposit Insurance Corporation (FDIC), A credit union, since his deposits would be insured by the National Credit Union Association (NCUA), He could safely choose either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements., Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.

He could safely choose either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements.

What type of account should Ariel open to save money for a new computer before college?

Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer.

Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest? Options: Interest is the price paid for using someone else’s money., When earning interest, look for low rates., When paying interest, look for low rates., The amount of interest earned or paid is determined by the interest rate.

When earning interest, look for low rates.

Samantha wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do?

Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent is immediately deducted from her account.

Which statement is TRUE about Payroll Taxes? Options: Payroll taxes are paid on both earned and unearned income., Payroll taxes fund different operations and programs of the federal government., Payroll taxes fund the Social Security and Medicare programs., The amount of tax paid depends on many different factors but increases as income increases.

Payroll taxes fund the Social Security and Medicare programs.

As Mariah was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag showed for the item. What is this extra 6% charge most likely to be?

Sales tax on the shirt she purchased.

Which statement about property taxes should Dane EXCLUDE from his presentation because it is not correct? 1. Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use. 2. Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses incurred by these governments. 3. Property taxes are commonly paid on automobiles. This tax usually paid once per year when the automobile is licensed. 4. Property tax on homes, land and buildings are usually only paid once or twice each year.

Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use.

Which statement is NOT TRUE about property taxes? Options: Property tax is often charged by states or local governments to pay for local schools., The property tax rate is set by the federal government to be equal in every state., The fee paid to license a vehicle is an example of property tax., Property taxes are most often paid only once or twice each year.

The property tax rate is set by the federal government to be equal in every state.

What is the most likely reason that Austin’s pay is less than he expected it to be? Austin has just received his first paycheck. He worked 22 hours at his new job and is being paid $8.00 per hour. He calculated that his paycheck should be $176. His paycheck amount is almost 1/3 less than he expected. Options: Austin calculated the hours he worked without deducting the hours he spent doing on‐the‐job training., Austin neglected to deduct the excise tax paid on the uniforms he purchased to wear at his job., Austin neglected to deduct the amount required to pay income and payroll taxes., Austin’s employer made a mistake calculating the number of hours Austin worked during his first pay period.

Austin neglected to deduct the amount required to pay income and payroll taxes.

Brett is creating a Statement of Financial Position and needs to list his assets. Which of the following should he NOT list as an asset? Money in his checking account, His hockey equipment, The market value of his car

Money in the paycheck he will receive next week

To calculate her net worth, Jordyn should use the following formula:

Assets – liabilities = net worth

Maggie earns $62,000 per year and has a net worth of $20,000. Samantha earns $96,000 and has a net worth of $15,000. Who is wealthier?

Maggie, because her net worth is higher than Samantha’s.

Erin and her mother are putting together an Income and Expense Statement for Erin to use as she applies for a college scholarship. Which income source does she NOT need to include for this statement? Interest earned on her savings account., Money she received from her grandparents for her birthday., Social Security income her mother is receiving for her since her father died of cancer last year., Taxes she paid based on her income last year.

Taxes she paid based on her income last year.

Which should be recorded as expenses? Options: Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance , Money saved from his paycheck for emergencies, interest paid on his car loan, his tax refund from filing last year’s tax return , The scholarship he receives for studying Chinese at the local community college, his car insurance payment, and stock dividends he received from his grandmother , Clothing he purchased for a job interview, tuition for a class he is taking at the local community college, and interest from his savings account

Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance

Amanda and Marcus just finished their Income and Expense Statement for last month. They discovered that they have a net gain. What does this mean and what should they do?

Amanda and Marcus are earning more money than they are spending. They could place additional money in savings and/or spend it on other expenses.

Which of the following statements is NOT TRUE about spending plans? Spending plans are used to record planned income., Spending plans are used to record planned expenses., A spending plan includes items NOT usually included when creating a budget., When creating a spending plan, it is recommended that you examine your trade‐offs and opportunity costs.

A spending plan includes items NOT usually included when creating a budget.

When is your spending plan complete?

Spending plans are always under revision so they are never complete.

Which of Chase's expenses best fit the category of non‐contractual expenses? Options: Cell phone bill, gasoline, and car payment, Internet bill, entertainment, and clothing, Motorcycle payment, food, and cell phone bill, Gasoline, food, and entertainment

Gasoline, food, and entertainment

Michael wants to develop a spending plan for himself to use during his final year of high school. What will he need to do as his FIRST step?

Track his current income and expenses. If he has already created an Income and Expense Statement then he has completed this step.

Managing Your Money Test Review Flashcards

Student preview

58 questions

Show all answers

1.

FLASHCARD QUESTION

Front

A person can earn and be charged interest.

Back

True

2.

FLASHCARD QUESTION

Front

A debit card can be described as an electronic check that requires a PIN.

Back

True

3.

FLASHCARD QUESTION

Front

A budget should include money for saving, spending, and giving.

Back

True

4.

FLASHCARD QUESTION

Front

The total amount of money you make BEFORE deductions is called

Back

Gross income

5.

FLASHCARD QUESTION

Front

The total amount of money you make AFTER deductions is called

Back

Net income

6.

FLASHCARD QUESTION

Front

Anyone can open an account here: credit union, commercial bank, both?

Back

commercial bank

7.

FLASHCARD QUESTION

Front

What type of financial institution is owned by their customers? Options: credit union, commercial bank, both

Back

credit union

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