Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question. Base your responses
to questions 1-5 on the following information:
Your
occupation pays you $12.25 as an hourly wage; you work 40 hours during this week.
Calculate the Gross Pay, for each
deduction (FIT, SIT, FICA, and Medicare), and Net Pay. You have chosen to pay $42.00 per pay period
for Health Insurance and you contribute 10% of your gross pay to a savings account in the credit
union. Use the following tax information to calculate deductions for John Smith: Federal
Income Tax: 15%, State Income Tax: 6.85%, FICA (Social Security): 6.2%, and Medicare:
1.45%.
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1.
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What
is the amount of Gross Pay for John Smith? a. | $400.00 | c. | $490.00 | b. | $940.00 | d. | $480.00 | | | | |
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2.
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What
is the amount of Federal Income Tax for John Smith? a. | $57.30 | c. | $37.70 | b. | $73.50 | d. | $102.00 | | | | |
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3.
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What
are the total mandatory deductions for John Smith? a. | $144.56 | c. | $144.00 | b. | $156.44 | d. | $165.00 | | | | |
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4.
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What
are the total non-mandatory deductions for John Smith? a. | $19.00 | c. | $10.90 | b. | $109.00 | d. | $91.00 | | | | |
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5.
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What
is the Net Pay for John Smith? a. | $254.44 | c. | $244.55 | b. | $245.44 | d. | $254.00 | | | | |
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Matching
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a. | Fixed
Expenses | j. | Cash Flow | b. | W-2 | k. | Exempt Status | c. | Budget | l. | Net Pay | d. | W-4 | m. | Federal Income Tax | e. | Allowances | n. | Discretionary Income | f. | Deductions | o. | Pay Yourself First (PYF) | g. | Gross Pay | p. | Medicare Tax | h. | Variable
Expenses | q. | Social Security Tax | i. | Income | | | | |
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6.
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A
spending and saving plan for managing your money during a given period of time.
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7.
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Money
you have coming in, as well as the money you have going out.
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8.
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Total
income before any payroll deductions.
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9.
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Amounts that are subtracted from your gross pay; Federal & State Income tax,
Social Security, Medicare, Union Dues, Credit Union, or other contributions.
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10.
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The
amount you take-home; gross pay minus all deductions. (USED FOR PREPARATION OF BUDGET.)
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11.
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Employer determines how much to withhold from your paycheck based on marital status
and allowances.
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12.
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Reduces the amount of tax withheld from your paycheck.
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13.
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Applies to people who do not earn enough during the year to owe any federal income
tax.
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14.
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An
annual summary of all wages earned and taxes that were withheld by your employer. (RECEIVE BY JANUARY
31ST AND USED TO PREPARE YOUR INCOME TAX RETURN FORM.)
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15.
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Cost
the same amount every time.
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16.
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Amounts that fluctuate; you have more control over these amounts.
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17.
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When
you receive income, you should immediately set aside a certain amount into an account for meeting a
financial goal.
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18.
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A fee
collected by the Federal Government to pay for services.
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19.
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A tax
that provides income and or services for old age, survivorship, and disabled.
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20.
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A tax
that provides medical insurance for the elderly & disabled.
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