Financial literacy Test Exam Questions
and Answers
Income - Answer-Any money that you receive
Sources of income - Answer-Salary
Allowance
Money from your birthday
Money from selling things
Interest earned from a savings account
Budget - Answer-A plan for managing your money during a given period of time.
Expense - Answer-What you spend your money on. (Needs and wants)
Fixed, variable, periodic - Answer-Fixed- those that cost the same every time
Variable- fluctuate in amount ( still may be able to estimate cost)
Periodic- expenses not paid all the time( both fixed and variable)
Deductions - Answer-Items subtracted from your paycheck
- taxes
- insurance
- retirement options
Taxes - Answer-Federal income tax- fee collected by the government to support its
programs
State taxes- pays for state services
Social security tax- goes to elderly , disabled and orphaned
Medicare- elderly and disabled
Gross income - Answer-Refers to the total amount of income from your salary prior to
deductions. (Hourly rate x #of hours worked) x 52
Net income - Answer-Take homeboy amount. Money left after all deductions are made
by your employer (net income= gross income - total deductions)
Building a budget - Answer-Lost all money you have coming in
Make categories for all expenses
Subtract total expenses from income
Savings accounts - Answer-Safe place to store money you do not plan on using the
right way
Good for short/ medium term goals
Minimal fees
and Answers
Income - Answer-Any money that you receive
Sources of income - Answer-Salary
Allowance
Money from your birthday
Money from selling things
Interest earned from a savings account
Budget - Answer-A plan for managing your money during a given period of time.
Expense - Answer-What you spend your money on. (Needs and wants)
Fixed, variable, periodic - Answer-Fixed- those that cost the same every time
Variable- fluctuate in amount ( still may be able to estimate cost)
Periodic- expenses not paid all the time( both fixed and variable)
Deductions - Answer-Items subtracted from your paycheck
- taxes
- insurance
- retirement options
Taxes - Answer-Federal income tax- fee collected by the government to support its
programs
State taxes- pays for state services
Social security tax- goes to elderly , disabled and orphaned
Medicare- elderly and disabled
Gross income - Answer-Refers to the total amount of income from your salary prior to
deductions. (Hourly rate x #of hours worked) x 52
Net income - Answer-Take homeboy amount. Money left after all deductions are made
by your employer (net income= gross income - total deductions)
Building a budget - Answer-Lost all money you have coming in
Make categories for all expenses
Subtract total expenses from income
Savings accounts - Answer-Safe place to store money you do not plan on using the
right way
Good for short/ medium term goals
Minimal fees
