W!SE Financial Literacy Certification
Questions and Correct Answers| 2026
Earned Income
Income derived from active participation
in a trade or business, including wages, salary, tips,
commissions and bonuses.
Unearned Income
Any income that comes from investments and other sources unrelated to
employment services. Examples: interest from a savings account, bond interest,
alimony, and dividends from stock
Exemptions (aka allowance) and how they work
If you are not claimed as a dependent on another
taxpayer's return, then you can claim one personal tax
,exemption. The exemption reduces your taxable income just like a deduction does,
but has fewer restrictions to claiming it. If you are married and file a joint tax
return, both you and your spouse each get an exemption.
Exemptions (aka allowance) and how they work PART 2
The IRS allows you to take additional exemptions for each dependent you claim.
Frequently, the source of these exemptions are the children who live with you for
more than half the year, are under 19 years old (or under 24 if a full-time student)
and who don't provide more than half of their own financial support during the
tax year.
Liquidity - what does it mean?
The ability to convert an asset to cash quickly and with
minimal impact to the price.
Liquidity - what financial products are liquid?
Examples: Cash, Most stocks, money market instruments and government bonds.
Gift cards - how do they work?
A gift card is a restricted monetary equivalent is issued by retailers or banks to be
used as an alternative to a non-monetary gift.
, Gift cards - how do they work - fees?
Prepaid cards, gift cards, and gift certificates cannot expire within five years of
activation or unless the terms of the expiration are clearly disclosed. The law bans
dormancy fees, inactivity fees or service fees on gift cards unless there has been
no activity in a 12-month period and the issuer clearly discloses all fees before the
gift card is purchased.
Gift cards - how do they work - fees? (Exclusions)
Prepaid phone cards , re-loadable cards, loyalty
or rewards cards, cards issued for admission to special
events or venues and certificates issued in paper form only are exempt.
Discretionary income and budget surplus
The amount of an individual's income that is left for
spending, investing or saving after taxes and personal
necessities (such as food, shelter, and clothing) have been paid. Discretionary
income includes money spent on luxury items, vacations and non-essential goods
and services.
Money orders - high rate of counterfeits
Questions and Correct Answers| 2026
Earned Income
Income derived from active participation
in a trade or business, including wages, salary, tips,
commissions and bonuses.
Unearned Income
Any income that comes from investments and other sources unrelated to
employment services. Examples: interest from a savings account, bond interest,
alimony, and dividends from stock
Exemptions (aka allowance) and how they work
If you are not claimed as a dependent on another
taxpayer's return, then you can claim one personal tax
,exemption. The exemption reduces your taxable income just like a deduction does,
but has fewer restrictions to claiming it. If you are married and file a joint tax
return, both you and your spouse each get an exemption.
Exemptions (aka allowance) and how they work PART 2
The IRS allows you to take additional exemptions for each dependent you claim.
Frequently, the source of these exemptions are the children who live with you for
more than half the year, are under 19 years old (or under 24 if a full-time student)
and who don't provide more than half of their own financial support during the
tax year.
Liquidity - what does it mean?
The ability to convert an asset to cash quickly and with
minimal impact to the price.
Liquidity - what financial products are liquid?
Examples: Cash, Most stocks, money market instruments and government bonds.
Gift cards - how do they work?
A gift card is a restricted monetary equivalent is issued by retailers or banks to be
used as an alternative to a non-monetary gift.
, Gift cards - how do they work - fees?
Prepaid cards, gift cards, and gift certificates cannot expire within five years of
activation or unless the terms of the expiration are clearly disclosed. The law bans
dormancy fees, inactivity fees or service fees on gift cards unless there has been
no activity in a 12-month period and the issuer clearly discloses all fees before the
gift card is purchased.
Gift cards - how do they work - fees? (Exclusions)
Prepaid phone cards , re-loadable cards, loyalty
or rewards cards, cards issued for admission to special
events or venues and certificates issued in paper form only are exempt.
Discretionary income and budget surplus
The amount of an individual's income that is left for
spending, investing or saving after taxes and personal
necessities (such as food, shelter, and clothing) have been paid. Discretionary
income includes money spent on luxury items, vacations and non-essential goods
and services.
Money orders - high rate of counterfeits
