Financial Literacy Review

Amanda has to pay taxes on her annual salary and investments. Which type of tax is Kimberly paying?

• Sales Tax

• Property Tax

• Payroll Tax

• Income Tax

Which of the following is an advantage of using a credit card?

• Interest is charged for the use of a credit card.

• Consumers can purchase things now, and pay for them later in the event of an emergency.

• You could be a victim of identity theft.

• It is used just like a check.

Alyssa has her first job at the local bakery. After working for one week, she received her first paycheck. The total amount of money she is able to put in the bank is $75.62. What type of income does this amount describe?

• Gross Income
• Net Income
• Both Gross and Net Income
• None of the above

Jonathan's new clothes cost a total of $572.50 before tax. What type of tax does Jonathan have to pay for his new clothes?

• Income Tax
• Property Tax
• Payroll Tax
• Sales Tax

Amarise's salary has a net income of $235 per week. If she pays $30 in income tax and $15 in payroll tax, how could Juliette determine her gross income? Why?

• 235 – 30 – 15 = $190 Net income minus all deductions equals gross income.
• 235 + 15 = $250 Net income plus payroll tax deductions equals gross income.
• 235 + 30 = $265 Net income plus income tax deductions equals gross income.
• 235 + 30 + 15 = $280 Net income plus all deductions equals gross income.

Which of the following is considered an advantage to using a debit card to make purchases?

• Debit cards are convenient and easy to carry around.
• Purchases can be made quickly and easily.
• You can use many ATMs to get cash.
• All of the above.

Credit card purchase:

• Pay now?

• Pay later?

Debit card purchase:

• Pay now?

• Pay later?

A paper transaction giving a bank permission to transfer payment from your account to another account is known as a/an _________________________.

• Check

• Debit Card

• Credit Card

• Electronic Transfer

What is the difference between gross income and net income?

• Gross income is income after deductions, while net income is income before deductions.

• Gross income is income taken home, while net income is what you actually get paid.

• Gross income is money earned BEFORE deductions, while net income is money earned AFTER deductions.

• Gross and net income are both the same thing but with different names.