BUSINESS MATH, FINAL EXAM 1
QUESTIONS WITH CORRECT ANSWERS
piece-rate - ANSWER-some employees are paid for each item or piece they produce;
Number of Pieces Produced x Piece Rate = Gross Pay
per diem - ANSWER-means "by the day"; employees are paid a fixed amount by their
employer; Per Diem Rate x Number of Days = Gross Pay
tip - ANSWER-an amount of money given to someone for services they provide; also
called gratuity; Tip Percent x Total Bill = Tip Amount
deductions - ANSWER-subtractions from gross pay
withholding taxes - ANSWER-the federal government, as well as many states and cities,
require employers to deduct money from employee wages for income taxes, plus social
security and Medicare taxes
withholding allowance - ANSWER-used to reduce the amount of tax withheld
FICA - ANSWER-include disability benefits, Medicare, retirement benefits, and
survivors' benefits
Medicare - ANSWER-tax rate is 1.45%
social security - ANSWER-tax rate is 6.2%
overall tax rate - ANSWER-7.65%
net pay (take-home pay) - ANSWER-after all deductions are subtracted from gross pay,
an amount remains; Gross Pay - Deductions = Net Pay
employee benefits (fringe benefits) - ANSWER-many employers provide other things of
value; for examples, low-cost health and accident insurance, life insurance, pensions,
paid holidays, sick leave, vacation time, the use of a car, a credit union, uniforms,
parking, discounts for purchases of merchandise, recreational facilities, child care, and
education or training
job expenses - ANSWER-union or professional dues; commuting expenses, uniforms,
licenses, and tools
net job benefits - ANSWER-subtract total job expenses from total job benefits; Total Job
Benefits - Job Expenses = Net Job Benefits
, federal income tax return - ANSWER-income earned and taxes due are reported on this
gross income - ANSWER-the total amount in a year and includes income from wages,
salaries, commissions, bonuses, tips, interest, dividends, prizes, pensions, the sale of
stock, and profit from a business
adjustments - ANSWER-from gross income, you may be eligible to subtract from
income; includes business losses, payments to approved retirement plans, alimony, and
certain penalties; the amount left is called adjusted gross income; Adjusted Gross
Income = Gross Income - Adjustments to Income
taxable income - ANSWER-the income on which you actually pay tax; Taxable Income
= Adjusted Gross Income - Deductions and Exemptions
standard deduction - ANSWER-may claim a fixed amount; $4,850
itemized deductions - ANSWER-if your actual deductions are more than the standard
deduction, you list all your deductions on your tax return under this section
exemption - ANSWER-an amount of income per person that is free from tax; claim one
for yourself, one for your spouse, and one for each dependent; $3,000
earned income - ANSWER-from the dependent's own labor, such as wages, salaries,
and tips; everything else is unearned income (include interest and dividends)
standard deduction, the higher of these two amounts - ANSWER-a. $800
b. the amount of earned income, plus $250, up to $4,850
flat tax - ANSWER-a fixed tax; does not change no matter how much taxable income a
person has
cash receipts records - ANSWER-written records of money received
cash payments records - ANSWER-written records of money paid out
columnar cash payments record - ANSWER-used special money columns to place
every payment into categories, such as housing, food, and auto
grand total - ANSWER-corner total; used in business often to check the accuracy of
work
budgets - ANSWER-your future spending plans
deposit slip - ANSWER-a form used to list all money deposited in a bank
check register - ANSWER-a record of deposits and checks
QUESTIONS WITH CORRECT ANSWERS
piece-rate - ANSWER-some employees are paid for each item or piece they produce;
Number of Pieces Produced x Piece Rate = Gross Pay
per diem - ANSWER-means "by the day"; employees are paid a fixed amount by their
employer; Per Diem Rate x Number of Days = Gross Pay
tip - ANSWER-an amount of money given to someone for services they provide; also
called gratuity; Tip Percent x Total Bill = Tip Amount
deductions - ANSWER-subtractions from gross pay
withholding taxes - ANSWER-the federal government, as well as many states and cities,
require employers to deduct money from employee wages for income taxes, plus social
security and Medicare taxes
withholding allowance - ANSWER-used to reduce the amount of tax withheld
FICA - ANSWER-include disability benefits, Medicare, retirement benefits, and
survivors' benefits
Medicare - ANSWER-tax rate is 1.45%
social security - ANSWER-tax rate is 6.2%
overall tax rate - ANSWER-7.65%
net pay (take-home pay) - ANSWER-after all deductions are subtracted from gross pay,
an amount remains; Gross Pay - Deductions = Net Pay
employee benefits (fringe benefits) - ANSWER-many employers provide other things of
value; for examples, low-cost health and accident insurance, life insurance, pensions,
paid holidays, sick leave, vacation time, the use of a car, a credit union, uniforms,
parking, discounts for purchases of merchandise, recreational facilities, child care, and
education or training
job expenses - ANSWER-union or professional dues; commuting expenses, uniforms,
licenses, and tools
net job benefits - ANSWER-subtract total job expenses from total job benefits; Total Job
Benefits - Job Expenses = Net Job Benefits
, federal income tax return - ANSWER-income earned and taxes due are reported on this
gross income - ANSWER-the total amount in a year and includes income from wages,
salaries, commissions, bonuses, tips, interest, dividends, prizes, pensions, the sale of
stock, and profit from a business
adjustments - ANSWER-from gross income, you may be eligible to subtract from
income; includes business losses, payments to approved retirement plans, alimony, and
certain penalties; the amount left is called adjusted gross income; Adjusted Gross
Income = Gross Income - Adjustments to Income
taxable income - ANSWER-the income on which you actually pay tax; Taxable Income
= Adjusted Gross Income - Deductions and Exemptions
standard deduction - ANSWER-may claim a fixed amount; $4,850
itemized deductions - ANSWER-if your actual deductions are more than the standard
deduction, you list all your deductions on your tax return under this section
exemption - ANSWER-an amount of income per person that is free from tax; claim one
for yourself, one for your spouse, and one for each dependent; $3,000
earned income - ANSWER-from the dependent's own labor, such as wages, salaries,
and tips; everything else is unearned income (include interest and dividends)
standard deduction, the higher of these two amounts - ANSWER-a. $800
b. the amount of earned income, plus $250, up to $4,850
flat tax - ANSWER-a fixed tax; does not change no matter how much taxable income a
person has
cash receipts records - ANSWER-written records of money received
cash payments records - ANSWER-written records of money paid out
columnar cash payments record - ANSWER-used special money columns to place
every payment into categories, such as housing, food, and auto
grand total - ANSWER-corner total; used in business often to check the accuracy of
work
budgets - ANSWER-your future spending plans
deposit slip - ANSWER-a form used to list all money deposited in a bank
check register - ANSWER-a record of deposits and checks
