Budgeting and Personal Finance Quiz

In the 50/30/20 budget rule, what percentage of your income is allocated to needs?

• 50%

• 30%

• 20%

• 10%

Which statement best explains the difference between needs and wants?

• Needs are essential for living, while wants are nice to have but not necessary

• Needs are things you buy for fun, wants are things you must have

• Needs are always more expensive than wants

• Wants are required for survival, needs are optional

Which of the following best describes the purpose of the Federal Insurance Contributions Act (FICA)?

• To fund Social Security and Medicare programs

• To provide health insurance for all citizens

• To pay for public education

• To fund state unemployment benefits

Which payroll form is used to verify the identity and employment authorization of individuals hired for employment in the United States?

• W-2 Form

• W-4 Form

• I-9 Form

• 1040 Form

What information does a W-2 form provide to employees?

• How much tax to withhold from each paycheck

• Important information about income earned, taxes withheld, and benefits provided for the year

• Verification of identity and employment authorization

• Instructions for filing state taxes

What is the main purpose of payroll deductions?

• To increase an employee's net pay

• To withhold wages for taxes, garnishments, and benefits

• To provide bonuses to employees

• To calculate overtime pay

Which of the following is NOT typically included in payroll deductions?

• Income tax

• Social security tax

• Health insurance

• Grocery expenses

How do variable expenses differ from fixed expenses in terms of budgeting?

• Variable expenses are always higher than fixed expenses

• Variable expenses can change each month, while fixed expenses remain constant

• Variable expenses are paid annually, fixed expenses are paid monthly

• Variable expenses are only for businesses

If an employee wants to change the amount of tax withheld from their paycheck, which form should they update?

• W-2 Form

• I-9 Form

• W-4 Form

• 1099 Form

Which of the following best describes a discretionary expense?

• A non-essential expense that is classified as a "want"

• An expense that is required for survival

• A mandatory payment like taxes

• An expense that is always fixed each month