FSV VOCAB 02 - Pay and Tax

What is Earned Income?

• A) A tax-advantaged retirement account employers offer to help their employees.

• B) Money made from working for someone based on your time, effort, and skill.

• C) A cash reserve specifically set aside for unplanned expenses or financial emergencies.

• D) A prediction of how likely you are to pay a loan back on time based on your credit history.

What type of income is generated from investments such as stocks, bonds, mutual funds, and real estate?

• A) Earned Income

• B) Passive Income

• C) Portfolio Income

• D) Net Pay

Which term describes income that requires minimal effort to obtain, such as earnings from business activities in which the earner does not participate?

• A) Gross Pay

• B) Passive Income

• C) Progressive Income

• D) Emergency Savings

What is Gross Pay?

• A) Pay you receive after taxes and other deductions are taken out.

• B) Total pay before taxes and other deductions are taken out.

• C) A flat tax on your paycheck including Social Security & Medicare.

• D) A progressive tax on income charged by the federal government and most states.

What is Net Pay also known as?

• A) Portfolio Income

• B) Payroll Tax

• C) Take Home Pay

• D) Passive Income

What is Income Tax?

• A) A flat tax on your paycheck including Social Security & Medicare.

• B) A tax-advantaged retirement account employers offer to help their employees.

• C) A cash reserve specifically set aside for unplanned expenses or financial emergencies.

• D) A progressive tax on income charged by the federal government and most states.

What is Payroll Tax?

• A) A progressive tax on income charged by the federal government and most states.

• B) A flat tax on your paycheck including Social Security & Medicare.

• C) A prediction of how likely you are to pay a loan back on time based on your credit history.

• D) Money made from working for someone based on your time, effort, and skill.

What does a Credit Score predict?

• A) The amount of money made from working for someone based on time, effort, and skill.

• B) The level of effort required to obtain earnings from business activities.

• C) How likely you are to pay a loan back on time based on your credit history and debt repayment history.

• D) The total pay before taxes and other deductions are taken out.

What is a 401(k)?

• A) A cash reserve specifically set aside for unplanned expenses or financial emergencies.

• B) A flat tax on your paycheck including Social Security & Medicare.

• C) A tax-advantaged retirement account employers offer to help their employees.

• D) A progressive tax on income charged by the federal government and most states.

What is Emergency Savings?

• A) A tax-advantaged retirement account employers offer to help their employees.

• B) A flat tax on your paycheck including Social Security & Medicare.

• C) A cash reserve specifically set aside for unplanned expenses or financial emergencies.

• D) A prediction of how likely you are to pay a loan back on time based on your credit history.