FBLA Business Calculations Ch 6 7 & 10
Exam Questions and Answers
exemptions - Answer-a deduction from taxable income for each dependent
FUTA - Answer-(Federal Unemployment Tax Act) tax authorizing the IRS to collect a tax
on each employer's payroll to fund state workforce agencies.
IRA - Answer-(Individual Retirement Account) with some restrictions set by the IRS,
employed individuals can set aside pre-tax funds for their retirement years in a
traditional IRA or a Roth IRA.
itemized deductions - Answer-amounts subtracted from adjusted gross income become
tax is computed.
property tax - Answer-a tax imposed on a property owner to help fund public services
such as fire and police protection, schools, and parks.
SUTA - Answer-(State Unemployment Tax Act) tax collected by state governments to
fund state workforce agencies, is used solely for the payment of benefits to eligible
unemployed workers.
taxable income - Answer-the amount of income subject to tax after adjustments,
deductions, and exemptions..
total income - Answer-all the income you receive.
automobile liability insurance - Answer-Insurance that covers damages for bodily injury
& property damage for which an insured person becomes legally responisble because
of an auto accident.
beneficary - Answer-Person or persons designated to receive the proceeds of a life
insurance policy in the event of the insured's death.
collision coverage - Answer-Pays for damage to the insured's vehicle as a result of an
accident.
comprehensive coverage - Answer-Pays to fix an individuals vehicle less any deductible
not caused by an accident, such as vandalism, theft,storm, or fire.
deductible - Answer-An amount deducted from an insurance settlement,the amount of
loss the insured agrees to accept.
face value - Answer-The amount of insurance purchased.
, hmo - Answer-A managed health care organization which attempts to lower costs by
negotiating discounted rates for their policyholders.
liability - Answer-An obligation for which someone is responsible.
life insurance - Answer-An agreement providing for the payment of a stipulated sum to
one or more beneficiaries upon the death of the insured person.
POS - Answer-A managed health care organization which attempts to lower cost by
negotiating discounted rates for their policyholders; focuses on preventive care.
PPO - Answer-A managed health care organization which attempts to lower cost by
negotiating discounted rates for their policyholders. Differs from other organizations in
the amount of control plan members have in their choice of health care providers and
the cost of premiums, co-payments and deductibles.
Term - Answer-The time for which an insurance policy is effect.
Compound Interest - Answer-Is the money that builds on itself ; that is, it earns money
on the interest that is reinvested as well as on the original principal.
Maturity Date - Answer-The date on which a loan must be paid in full.
payee - Answer-An individual or a business paid a certain sum from a checking account
as authorized by a check.
principal - Answer-the initial amount borrowed
rate - Answer-The percent charged to lend or borrow money, abbreviated as R.
Straight Line Depreciation Method - Answer-Straight Line Depreciation Method
The simplest and most commonly used depreciation method, straight line depreciation
is calculated by taking the purchase or acquisition price of an asset subtracted by the
salvage value divided by the total productive years the asset can be reasonably
expected to benefit the company (called "useful life" in accounting jargon).
Straight Line Depreciation Calculation
(Purchase Price of Asset - Approximate Salvage Value) ÷ Estimated Useful Life of
Asset
Declining Balance Method - Answer-A way of calculating the depreciation of an asset
whereby one subtracts a certain percentage of its current value each year. For example,
suppose an asset costing $100,000 depreciates 10% each year. After the first year, it
depreciates to $90,000. In the second year, one deducts 10% from the $90,000, rather
than the original $100,000. Thus, the depreciated value after the second year is
$81,000. This is a common means of calculating depreciation.
Exam Questions and Answers
exemptions - Answer-a deduction from taxable income for each dependent
FUTA - Answer-(Federal Unemployment Tax Act) tax authorizing the IRS to collect a tax
on each employer's payroll to fund state workforce agencies.
IRA - Answer-(Individual Retirement Account) with some restrictions set by the IRS,
employed individuals can set aside pre-tax funds for their retirement years in a
traditional IRA or a Roth IRA.
itemized deductions - Answer-amounts subtracted from adjusted gross income become
tax is computed.
property tax - Answer-a tax imposed on a property owner to help fund public services
such as fire and police protection, schools, and parks.
SUTA - Answer-(State Unemployment Tax Act) tax collected by state governments to
fund state workforce agencies, is used solely for the payment of benefits to eligible
unemployed workers.
taxable income - Answer-the amount of income subject to tax after adjustments,
deductions, and exemptions..
total income - Answer-all the income you receive.
automobile liability insurance - Answer-Insurance that covers damages for bodily injury
& property damage for which an insured person becomes legally responisble because
of an auto accident.
beneficary - Answer-Person or persons designated to receive the proceeds of a life
insurance policy in the event of the insured's death.
collision coverage - Answer-Pays for damage to the insured's vehicle as a result of an
accident.
comprehensive coverage - Answer-Pays to fix an individuals vehicle less any deductible
not caused by an accident, such as vandalism, theft,storm, or fire.
deductible - Answer-An amount deducted from an insurance settlement,the amount of
loss the insured agrees to accept.
face value - Answer-The amount of insurance purchased.
, hmo - Answer-A managed health care organization which attempts to lower costs by
negotiating discounted rates for their policyholders.
liability - Answer-An obligation for which someone is responsible.
life insurance - Answer-An agreement providing for the payment of a stipulated sum to
one or more beneficiaries upon the death of the insured person.
POS - Answer-A managed health care organization which attempts to lower cost by
negotiating discounted rates for their policyholders; focuses on preventive care.
PPO - Answer-A managed health care organization which attempts to lower cost by
negotiating discounted rates for their policyholders. Differs from other organizations in
the amount of control plan members have in their choice of health care providers and
the cost of premiums, co-payments and deductibles.
Term - Answer-The time for which an insurance policy is effect.
Compound Interest - Answer-Is the money that builds on itself ; that is, it earns money
on the interest that is reinvested as well as on the original principal.
Maturity Date - Answer-The date on which a loan must be paid in full.
payee - Answer-An individual or a business paid a certain sum from a checking account
as authorized by a check.
principal - Answer-the initial amount borrowed
rate - Answer-The percent charged to lend or borrow money, abbreviated as R.
Straight Line Depreciation Method - Answer-Straight Line Depreciation Method
The simplest and most commonly used depreciation method, straight line depreciation
is calculated by taking the purchase or acquisition price of an asset subtracted by the
salvage value divided by the total productive years the asset can be reasonably
expected to benefit the company (called "useful life" in accounting jargon).
Straight Line Depreciation Calculation
(Purchase Price of Asset - Approximate Salvage Value) ÷ Estimated Useful Life of
Asset
Declining Balance Method - Answer-A way of calculating the depreciation of an asset
whereby one subtracts a certain percentage of its current value each year. For example,
suppose an asset costing $100,000 depreciates 10% each year. After the first year, it
depreciates to $90,000. In the second year, one deducts 10% from the $90,000, rather
than the original $100,000. Thus, the depreciated value after the second year is
$81,000. This is a common means of calculating depreciation.
