Chapter 7 Review

Net pay is a person's take-home pay.

• True

• False

Medicare tax is the amount of tax on earnings at the state level based on percent of income.

• True

• False

A deficit is excess cash to pay down debt, invest, pay for education, take a trip, boost retirement, or handle financial emergencies.

• True

• False

Pay stubs may look different depending on the employer.

• True

• False

A variable expense is money spent on something that remains about the same amount each month.

• True

• False

The amount of money a person earns before payroll deductions is called

• Gross pay

• Net pay

• Fixed expense

• Income

What are some items a person should look for when reviewing their pay stub?

• Verify the calculation of their gross pay

• Make sure their employer and employee information is correct

• Check that their marital status and withholding allowance information is correct

• All of the above

What are some examples of payroll deductions?

• Medicare tax

• State income tax

• Federal income tax

• All of the above

Money coming in and money going out is known as

• Expense

• Cash flow

• Gross pay

• Income

What is NOT an example of a fixed expense?

• Cell phone payment

• Car insurance

• Clothes

• Rent