Multiple Choice #1
Debit cards
(a) allow 30 days to pay for purchases
(b) have no annual fee
(c) allow immediate deductions from checking accounts
(d) are the same as credit cards
(c) allow immediate deductions from checking accounts
A check written by a bank on its own funds is a
(a) certified check
(b) cashier’s check
(c) share draft check
(d) traveler’s check
(b) cashier’s check
The easiest income tax form to use is Form
(a) 1040
(b) 1040A
(c) 1040EZ
(d) W-2
(c) 1040EZ
The person to whom a check is made payable is called the
(a) banker
(b) payee
(c) maker
(d) drawer
(b) payee
Income tax returns must be filed by ___ unless an extension is requested.
(a) January 15
(b) April 1
(c) April 15
(d) June 15
(c) April 15
Property taxes are
(a) progressive taxes
(b) regressive taxes
(c) proportional taxes
(d) graduated rate taxes
(c) proportional taxes
The AFL-CIO is a(n)
(a) tax form
(b) union
(c) labor law
(d) company
(b) union
Net worth is defined as
(a) liabilities minus debt
(b) assets plus liabilities
(c) assets minus liabilities
(d) debt minus liabilities
(c) assets minus liabilities
Which of the following is not taxable?
(a) interest income
(b) unemployment income
(c) Social Security income
(d) child support income
(d) child support income
Competence or legal ability to enter a contract is called
(a) consideration
(b) legality
(c) capacity
(d) mutual assent
(c) capacity
Rent car payment and average utilities are classified as
(a) fixed expenses
(b) variable expenses
(c) surplus expenses
(d) long-term liabilities
(a) fixed expenses
Money you have to spend after taxes and other deductions is called
(a) gross pay
(b) regular pay
(c) disposable income
(d) taxable income
(c) disposable income
Gross income less adjustments such as IRA contributions is called
(a) taxable income
(b) adjusted gross income
(c) disposable income
(d) net income
(b) adjusted gross income
When a valid offer is made and accepted a contract has legal
(a) agreement
(b) consideration
(c) value
(d) capacity
(a) agreement
Genuine agreement does not exist when there is
(a) a mistake
(b) fraud
(c) undue influence
(d) all of the above
(d) all of the above
The monthly process of matching the checkbook register to the bank’s records is called
(a) statement of account
(b) reconciliation
(c) check safekeeping
(d) balancing
(b) reconciliation
To sign over a check to a third person a payee uses a
(a) restrictive endorsement
(b) joint endorsement
(c) special endorsement
(d) blank endorsement
(c) special endorsement
Which type of account allows you to write only a small number of checks each month?
(a) special
(b) standard
(c) share draft
(d) interest-bearing
(a) special
When the government spends more than it receives in revenue it has a
(a) surplus
(b) deficit
(c) bonus
(d) refund
(b) deficit
A taxpayer’s claim on a tax return for each person dependent on the taxpayer’s income is called a(n)
(a) exemption
(b) allowance
(c) deduction
(d) relative
(a) exemption
Which of the following is not a true statement about a negotiable instrument?
(a) It must be in writing (not oral)
(b) It must contain a definite amount
(c) It must be payable on demand or on a determinable future date
(d) It must be delivered to the payer
(d) It must be delivered to the payer
Scheduling of the normal 40-hour workweek into less than five days is called
(a) jobrotation
(b) job sharing
(c) compressed workweek
(d) flextime
(c) compressed workweek
Expenses the law allows a taxpayer to subtract from adjusted gross income are called
(a) exemptions
(b) allowances
(c) itemized deductions
(d) tax credits
(c) itemized deductions
A person would choose Form 1040 in order to
(a) itemize deductions
(b) report interest and dividends
(c) claim exemptions
(d) claim the standard deduction
(a) itemize deductions
The statement showing money withheld by an employer for income and Social Security taxes is
(a) Form 1040
(b) Form W-4
(c) Form W-2
(d) Form 1040X
(c) Form W-2