WorksheetsSSPFL1 and SSPFL2 Summative Assessment
Total questions: 28
Worksheet time: 14mins
Income is considered a scarce resource because:
People earn more than they need
It is unlimited and grows automatically
It must be allocated among competing needs and wants
It does not affect financial decisions
A person who is paid a fixed amount every year receives which type of income?
Hourly wage
Salary
Tips
Commission
Which type of income is reported on a Form 1099?
Salary
Hourly wages
Independent contractor earnings
Employer-paid benefits
Dividends are:
Profit shares paid to stockholders
Wages earned from part-time work
Tips earned from customer service
Bonuses for good job performance
Capital gains occur when:
You earn tips from customers
You sell an investment for more than you paid
You receive employer health benefits
You work overtime
A person’s income is MOST influenced by:
Their favorite hobbies
Their education, skills, and career choices
The city they live in
The price of consumer goods
When unemployment is high in an economy:
Income levels typically rise
Job opportunities decrease
Taxes decrease automatically
Employers must raise wages
Disposable income is:
Income before taxes
Income after taxes and deductions
Total annual salary
Money invested in retirement funds
FICA deductions include:
Property taxes and insurance
Social Security and Medicare
Health insurance premiums only
State taxes only
Gross pay is:
Income after deductions
Income before deductions
Only income from second jobs
Only income from tips
Net pay is also known as:
Total income
Take-home pay
Retirement income
Optional income
In a budget, the term ‘needs’ refers to:
Entertainment and vacations
Essential expenses necessary for survival
Items you want but don’t need
Luxury items
A long-term financial goal is typically achieved in:
Less than 3 months
3 to 12 months
1 year or more
One week
When reconciling a checking account, you must account for:
Only posted transactions
Unposted checks and weekend transactions
Only debit card purchases
Only ATM withdrawals
Overdraft fees are charged when:
Your account balance is high
You deposit a check
You spend more than you have in your account
You earn interest
The best way to avoid overdraft fees is to:
Never use a debit card
Track your balance and consider opting out of overdraft protection
Close your checking account
Use only cash
Net worth is calculated by:
Subtracting investments from income
Adding debts and liabilities
Subtracting total liabilities from total assets
Adding income and savings
A personal budget should include:
Only expenses
Only savings
Income, expenses, and savings
Only checking account transactions
Explain why income must be allocated carefully.
It helps ensure essential expenses, savings, and obligations are covered and reduces the risk of debt or overdrafts.
It guarantees taxes will be eliminated from paychecks.
It allows spending without tracking and avoids budgeting.
It primarily increases interest earned on checking accounts.
Identify TWO common deductions that appear on a pay stub.
Federal income tax
FICA payroll tax (Social Security and Medicare)
Gross pay
Overtime pay
State one way education or skills can affect a person’s income.
Higher education or specialized skills generally increase earning potential.
Education guarantees the same wage for all workers regardless of job.
Skills typically lower wages because they limit job choices.
Education has no effect on income levels.
Describe the difference between a need and a want with an example.
A need is an essential expense required for living (e.g., rent), while a want is discretionary (e.g., concert tickets).
A need is anything you buy for fun, and a want is only bills.
Needs and wants are identical if you have savings.
A want must always be paid before a need to build credit.
Explain why reconciling a checking account is important.
It matches your records to the bank’s, helping catch errors or fraud and avoid overdrafts.
It removes all bank fees automatically.
It increases interest earnings on the account.
It replaces the need to track transactions.
Describe what an overdraft fee is AND one strategy to avoid it.
A fee charged when spending exceeds the account balance; avoid by tracking balances and using alerts or opting out of overdraft coverage.
A bonus paid for maintaining a minimum balance; avoid by writing more checks.
A fee for depositing cash; avoid by using ATMs only.
A penalty for early loan repayment; avoid by paying late.
Mia earns 15/hourandworked40hoursthisweek.Hergrosspayis 600. Her deductions include: Federal tax: 60;Statetax: 20; FICA: $46. What is her net pay?
$474
$540
$580
$600
Jason wants to save for a car in two years. Is this a short, medium, or long term goal?
Short term (less than 1 year)
Medium term (about 1–5 years)
Long term (more than 5 years)
Not a financial goal
A student has the following monthly expenses: Rent 650;Food 300; Entertainment 120;Transportation 60; Savings $150. Which category should the student reduce first if income decreases unexpectedly, and why?
Entertainment, because it is discretionary and not essential.
Rent, because fixed housing costs are optional.
Food, because groceries are unnecessary.
Transportation, because commuting should be eliminated.
You have 200inyourcheckingaccount.Saturday:buyshoes 90 (posts Monday). Sunday: groceries $150. Bank processes grocery transaction first. Will you be charged an overdraft fee?
Yes, because groceries reduce the balance to 50andwhenthe 90 shoe purchase posts on Monday the account goes negative.
No, because pending transactions never affect balances.
No, because the bank ignores posting order.
Yes, because fees are charged on deposits only.
