Budgeting Test Part 1 (I)

Front

What is net pay?

Back

Net pay, also known as take-home pay, is the amount of money an employee receives after all deductions, such as taxes and retirement contributions, have been subtracted from their gross pay.

Front

What is a fixed expense?

Back

A fixed expense is a cost that does not change from month to month, such as rent or a monthly gym membership.

Front

What is gross pay?

Back

Gross pay is the total amount of money earned by an employee before any deductions are taken out.

Front

What is a variable expense?

Back

A variable expense is a cost that can change from month to month, such as entertainment or dining out.

Front

What is a discretionary cost?

Back

A discretionary cost is an expense that is not essential and can be adjusted or eliminated, such as luxury items or vacations.

Front

How do you calculate net pay?

Back

Net pay is calculated by subtracting total deductions (taxes, retirement contributions, etc.) from gross pay.

Front

What is the difference between fixed and variable costs?

Back

Fixed costs remain constant regardless of activity level, while variable costs fluctuate based on usage or consumption.

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What is the importance of budgeting?

Back

Budgeting helps individuals manage their finances, plan for future expenses, and ensure they live within their means.

Front

What is the formula for calculating hourly wage?

Back

Hourly wage = Total pay / Total hours worked.

Front

What are deductions?

Back

Deductions are amounts subtracted from gross pay, including taxes, insurance, and retirement contributions.