PFL Semester Test

What is the first step in creating a budget?

• Spending all income

• Identifying fixed and variable expenses

• Tracking income and expenses

• Applying for a loan

A fixed expense is:

• A cost that changes every month

• A cost that remains the same every month

• An unnecessary expense

• A one-time cost

Which of the following is an example of a variable expense?

• Mortgage payment

• Grocery bill

• Car insurance

• Property taxes

Why is it important to save for emergencies in a budget?

• To avoid paying bills

• To cover unexpected expenses

• To increase fixed expenses

• To qualify for loans

What is the recommended percentage of income to save each month?

• 5%

• 10%

• 25%

• 50%

What is the purpose of income taxes?

• To fund government programs and services

• To increase personal savings

• To reduce inflation

• To decrease wages

Which form is used to report annual earnings and taxes withheld?

• W-4

• W-2

• 1040

• 1099

What is the sales tax?

• A tax on property ownership

• A tax on goods and services purchased

• A tax on income

• A tax on investments

Which of the following is deducted from a paycheck for federal programs like Social Security?

• Property tax

• FICA tax

• Sales tax

• Capital gains tax

What is the deadline to file federal income taxes in the United States?

• January 15

• March 1

• April 15

• June 30