Quiz about Final Assessment – Understanding a Paycheck and Pay Stub

Question 1

Which of these is an optional/voluntary deduction?

Accepted Answer

healthcare insurance

Answer

state income tax

Answer

Social Security tax

Answer

Medicare tax

Question 2

A fixed amount of money per year paid to an employee to do a job is known as a _____?

Accepted Answer

salary

Answer

hourly rate

Answer

deduction

Answer

overtime pay

Question 3

Which of these is the amount of money that remains after taxes have been deducted that a person can save or spend as he or she wishes?

Accepted Answer

disposable income

Answer

semi-monthly paycheck

Answer

gross pay

Answer

residents

Question 4

Gross pay and net pay are different because:

Accepted Answer

Gross pay is the total earnings before deductions, while net pay is the amount left after deductions.

Answer

Gross pay is the amount after taxes, while net pay is before taxes.

Answer

Gross pay and net pay are the same.

Answer

Gross pay is only for hourly workers, net pay is for salaried workers.

Question 5

3. What is a basic definition of disposable income?

Accepted Answer

The amount of money left after paying taxes

Answer

The total income before any deductions

Answer

Money spent on luxury items

Answer

Income received from investments

Question 6

4. List two deductions that are mandatory.

Accepted Answer

Provident Fund and Professional Tax

Answer

House Rent Allowance and Medical Allowance

Answer

Bonus and Overtime

Answer

Travel Allowance and Food Coupons

Question 7

Fill-Ins: Complete each sentence with the correct term. (gross pay, net pay, overtime, deduction, disposable income, pay stub) 5. A ________________ is any amount of money subtracted from your check.

Accepted Answer

deduction

Answer

gross pay

Answer

net pay

Answer

overtime

Question 8

8. ________________ is the amount of money you earn before deductions are subtracted.

Accepted Answer

Gross pay

Answer

Net pay

Answer

Taxable income

Answer

Take-home pay

Question 9

9. ________________ is the amount of money you earn after deductions are subtracted.

Accepted Answer

Net pay

Answer

Gross pay

Answer

Bonus

Answer

Allowance

Question 10

10. ________________ is the amount of money remaining after taxes have been deducted that a person can spend as he/she wishes.

Accepted Answer

Disposable income

Answer

Gross income

Answer

Net worth

Answer

Fixed expenses

Question 11

Which of these taxes is not included as withholding tax?

Accepted Answer

Real estate taxes

Answer

Federal and state taxes (if your state has state taxes)

Answer

Social security taxes

Answer

Medicare taxes

Question 12

The W-4 form is used by employers to determine:

Accepted Answer

the amount of money to be withheld from an employee to pay taxes.

Answer

the amount of money an employee should be earning.

Answer

the amount of money an employee should be saving from each paycheck.

Answer

future retirement money to be saved.

Question 13

1. What is withholding tax and what types of taxes does it include?

Accepted Answer

A tax deducted at source, including income tax and value-added tax.

Answer

A tax paid voluntarily, including property tax and sales tax.

Answer

A tax paid annually, including excise tax and customs duty.

Answer

A tax collected by local authorities, including road tax and entertainment tax.

Question 14

The difference between social security and Medicare is:

Accepted Answer

Social security provides retirement income, while Medicare provides health insurance.

Answer

Social security provides health insurance, while Medicare provides retirement income.

Answer

Both provide only retirement income.

Answer

Both provide only health insurance.

Question 15

A basic definition of a dependent is:

Accepted Answer

Someone who relies on another for financial support

Answer

A person who lives independently

Answer

A person who manages a business

Answer

Someone who pays taxes for others

Question 16

The purpose of a W-4 tax form is:

Accepted Answer

To determine the amount of federal income tax to withhold from an employee's paycheck

Answer

To report annual income to the IRS

Answer

To apply for a Social Security number

Answer

To file a tax return

Question 17

The amount of taxes employers withhold is based on what two things?

Accepted Answer

a. how much money an employee earns, b. the information provided on the W-4 form

Answer

a. the number of hours worked, b. the employee's age

Answer

a. the company's total revenue, b. the employee's job title

Answer

a. the state minimum wage, b. the employee's education level

Question 18

IRS stands for:

Accepted Answer

Internal Revenue Service, which collects taxes

Answer

International Rescue Squad, which provides emergency services

Answer

Institute of Research Studies, which conducts research

Answer

International Road Safety, which promotes road safety

Question 19

Which of the following is an advantage of using credit?

Accepted Answer

purchasing power

Answer

interest and fees

Answer

finance charges

Answer

overspending

Question 20

What term means how trusted you are to repay borrowed money?

Accepted Answer

creditworthiness

Answer

open-end credit

Answer

credit risk

Answer

FICO

Question 21

Which of these is not a part of your credit score?

Accepted Answer

high school grades

Answer

length of credit history

Answer

payment history

Answer

total amount that you owe

Question 22

If you have a good credit score, you are more likely to be offered:

Accepted Answer

all of the above

Answer

a job over another candidate

Answer

loans with better terms

Answer

low rates on car insurance

Question 23

An agreement to receive a service now and pay for it later

Accepted Answer

service credit

Answer

open-end credit

Answer

closed-end credit

Answer

credit report

Question 24

After paying off the balance, which type of credit remains open to be used again?

Accepted Answer

open-end credit

Answer

service credit

Answer

closed-end credit

Answer

finance charged credit

Question 25

Having good credit means you are a low-risk borrower.

Accepted Answer

True

Answer

False

Question 26

A credit score is also known as a FICO score.

Accepted Answer

True

Answer

False

Question 27

Creating many new credit accounts will improve your credit score.

Accepted Answer

False

Answer

True

Question 28

Your credit score is a point value of how well you have handled credit in the past, and how you may handle credit in the future.

Accepted Answer

True

Answer

False

Question 29

Each of the credit agencies use a different formula scoring model, so you might have three different credit scores.

Accepted Answer

True

Answer

False

Question 30

Once your credit score is calculated, there is nothing you can do to change it.

Accepted Answer

False

Answer

True

Question 31

The annual interest rate you will be charged if you carry a balance on your credit card.

Accepted Answer

Annual percentage rate

Answer

Minimum payment

Answer

Credit limit

Answer

Grace period

Question 32

A type of credit that can be used repeatedly with the option of paying the balance in full or making monthly payments.

Accepted Answer

Revolving credit

Answer

Installment credit

Answer

Secured loan

Answer

Payday loan

Question 33

Financial information compiled into a report that describes your credit history and financial responsibility.

Accepted Answer

Credit report

Answer

Bank statement

Answer

Income tax return

Answer

Loan agreement

Question 34

Money borrowed to buy something now with the understanding that the money will be paid back in the future.

Accepted Answer

Credit

Answer

Deposit

Answer

Withdrawal

Answer

Donation

Question 35

Extra money in the form of fees and interest that a consumer pays in addition to the amount they borrowed.

Accepted Answer

Finance charges

Answer

Principal amount

Answer

Net income

Answer

Gross profit

Question 36

The highest amount of money that can be charged on a credit card account.

Accepted Answer

Credit limit

Answer

Minimum payment

Answer

Interest rate

Answer

Billing cycle

Question 37

Which of the following are two ways you can protect yourself from credit fraud?

Accepted Answer

Monitor your credit report and use strong passwords

Answer

Share your credit card details online and ignore suspicious activity

Answer

Use public Wi-Fi for banking and write down your PINs

Answer

Lend your credit card to friends and keep your passwords simple

Question 38

Which of the following is an advantage of creating a budget?

Accepted Answer

all of the above.

Answer

budgets provide peace of mind

Answer

budgets give you control of your money.

Answer

budgets help you avoid impulse buying.

Question 39

Which of these are examples of a fixed expense? Choose 2 answers.

Accepted Answer

car payments

Accepted Answer

student loans

Answer

clothes

Answer

groceries

Question 40

Which of these are examples of a variable expense?

Accepted Answer

car repair bill

Accepted Answer

groceries

Answer

mortgage or rent

Answer

internet bill

Question 41

What are unplanned, spontaneous purchases sometimes triggered by emotions?

Accepted Answer

impulse purchases

Answer

fixed expenses

Answer

prioritizing

Question 42

An emergency cash fund is dedicated to covering unexpected expenses.

Accepted Answer

True

Answer

False

Question 43

Fixed expenses are often your most important, essential items and living expenses.

Accepted Answer

True

Answer

False

Question 44

Making wise choices about discretionary spending can help you save more money to achieve your goals.

Accepted Answer

True

Answer

False

Question 45

Customizing a financial plan for your own lifestyle, values, and needs makes it difficult to succeed.

Accepted Answer

False

Answer

True

Question 46

Once your budget is created, you will never have to look at it or change it.

Accepted Answer

False

Answer

True

Final Assessment – Understanding a Paycheck and Pay Stub

61 questions

What is a pay period?

What is gross pay?

Which of these is an optional/voluntary deduction?

Multiplying a worker’s hourly wage amount and hours worked per pay period equals?

A fixed amount of money per year paid to an employee to do a job is known as a _____?

Which of these is the amount of money that remains after taxes have been deducted that a person can save or spend as he or she wishes?

Gross pay and net pay are different because:

Deductions are amounts taken out of a worker’s paycheck. How do they affect a worker’s paycheck?

3. What is a basic definition of disposable income?

4. List two deductions that are mandatory.

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