Alabama Financial Literacy Test

Which of the following statements best describes gross pay?

• Amount of money one receives from insurance after an illness or accident

• Amount of money one receives from their job before taxes or other deductions are taken out

• Amount of money one receives from their job after taxes or other deductions are taken out

• Amount of money one earns from their job by overtime, bonuses, and reimbursements

Which of the following financial institutions receives criticism for targeting people in poverty and other vulnerable populations through charging extremely high interest rates?

• Pawn shops

• Check cashing services

• Credit unions

• Payday lenders

Which of the following purchasing cards removes funds from one’s checking account almost instantly after one makes a purchase?

• Credit card

• Debit card

• Payroll card

• Withdrawal card

All of the following are advantages of bundling insurance EXCEPT what?

• Convenience

• Increases insurance options

• Less complicated

• Potential saving of money

Which of the following positions can confirm signatures to a contract?

• Executive

• Legal signer

• Notary public

• Trustee

When eating at a restaurant, one must consider which of the following additional costs to the price of their meal and sales tax?

• Interest fee

• Reservation cost

• Service fee

• Tip

Which of the following best describes the concept of APR?

• Summary of all credit card transactions in one month

• The maximum amount one can charge on their credit card

• The fee charged if a credit card payment is late

• The credit card interest rate, calculated on a yearly basis

Which of the following is the form an employer provides to an employee to inform them of how much money was deducted from paychecks in a given year?

• W-4

• I-9

• W-2

• W-9

If one spends more money than they have in their bank account, they are charged a what?

• Debt fee

• Maintenance fee

• Overdraft fee

• Reserve fee

When seeking to open a bank account, which of the following is needed?

• Blank checks

• Government-issued identification

• Recommendation letter

• School transcript