Financial Literacy Test

Front

What is a budget?

Back

A budget is a plan that outlines expected income and expenses over a specific period.

Front

What does it mean to have expenses above income?

Back

It means spending more money than you earn, which can lead to financial problems.

Front

What is net income?

Back

Net income is the amount of money you receive after deductions (like taxes) are subtracted from your gross income.

Front

What is gross income?

Back

Gross income is the total amount of money earned before any deductions are taken out.

Front

What are deductions?

Back

Deductions are amounts taken away from your gross income, such as taxes and other withholdings.

Front

If you earn $3,410 and spend $3,500, what is your budget situation?

Back

You have a budget deficit of $90, meaning you spent more than you earned.

Front

How can you balance a budget?

Back

You can balance a budget by reducing expenses or increasing income.

Front

What is the formula to calculate net income?

Back

Net Income = Gross Income - Deductions.

Front

If Todd's net income is $825 and he pays $180 in taxes, what is his gross income?

Back

Todd's gross income is $1,005.

Front

If David's gross income is $127.25 and his deductions are $25.20, what is his net pay?

Back

David's net pay is $102.05.