H&R block UPDATED Exam Questions and
CORRECT Answers
paycheck - CORRECT ANSWER - a check given to an employee for earned income
paystub - CORRECT ANSWER - a statement that accompanies a paycheck highlighting
earned income and deductions
payperiod - CORRECT ANSWER - the range of dates an employee works
principle - CORRECT ANSWER - amount of money you pay on a monthly basis toward
paying off your loan
private mortgage insurance (PMI) - CORRECT ANSWER - a type of insurance used to
protect lenders if a borrower puts less than 20% down on a home purchase
Savings - CORRECT ANSWER - A traditional savings account where money is deposited
directly from gross pay
savings account - CORRECT ANSWER - A secure bank account that provides modest
interest rates
social security tax - CORRECT ANSWER - money collected by the federal government to
provide financial benefits needed in retirement and for the disabled
state income tax - CORRECT ANSWER - Tax paid to the state government, taken directly
out of people's paychecks.
, variable interest rate loan - CORRECT ANSWER - An interest rate on a loan or security
that fluctuates over time, because it is based on an underlying benchmark interest rate or index
that changes periodically.
W-2 - CORRECT ANSWER - A statement of an individual's annual wages and taxes
provided by an employer that must be included with the employee's federal, state, and city
income tax returns.
W-4 - CORRECT ANSWER - A federal tax form filled out by an employee to indicate the
amount that should be withheld from his/her paycheck for taxes.
401(k) - CORRECT ANSWER - A defined contribution plan that automatically takes out
money from an employee's paycheck before income taxes and invests it in mutual funds for
purposes of retirement savings
Adjustable rate mortgage (ARM) - CORRECT ANSWER - (ARM) A mortgage that
permits the lender to periodically adjust the interest rate to reflect fluctuations in the cost of
money.
auto insurance - CORRECT ANSWER - Insurance to protect a car owner in the event of
an accident or damage to a vehicle.
budget - CORRECT ANSWER - A detailed plan of income and expenses expected over a
certain period of time
cash flow - CORRECT ANSWER - the difference between cash coming in and cash going
out of a business
certificate of deposit - CORRECT ANSWER - a certificate issued by a bank to a person
depositing money for a specified length of time.
city income tax - CORRECT ANSWER - A tax assessed and levied by a local authority
such as a county or municipality.
CORRECT Answers
paycheck - CORRECT ANSWER - a check given to an employee for earned income
paystub - CORRECT ANSWER - a statement that accompanies a paycheck highlighting
earned income and deductions
payperiod - CORRECT ANSWER - the range of dates an employee works
principle - CORRECT ANSWER - amount of money you pay on a monthly basis toward
paying off your loan
private mortgage insurance (PMI) - CORRECT ANSWER - a type of insurance used to
protect lenders if a borrower puts less than 20% down on a home purchase
Savings - CORRECT ANSWER - A traditional savings account where money is deposited
directly from gross pay
savings account - CORRECT ANSWER - A secure bank account that provides modest
interest rates
social security tax - CORRECT ANSWER - money collected by the federal government to
provide financial benefits needed in retirement and for the disabled
state income tax - CORRECT ANSWER - Tax paid to the state government, taken directly
out of people's paychecks.
, variable interest rate loan - CORRECT ANSWER - An interest rate on a loan or security
that fluctuates over time, because it is based on an underlying benchmark interest rate or index
that changes periodically.
W-2 - CORRECT ANSWER - A statement of an individual's annual wages and taxes
provided by an employer that must be included with the employee's federal, state, and city
income tax returns.
W-4 - CORRECT ANSWER - A federal tax form filled out by an employee to indicate the
amount that should be withheld from his/her paycheck for taxes.
401(k) - CORRECT ANSWER - A defined contribution plan that automatically takes out
money from an employee's paycheck before income taxes and invests it in mutual funds for
purposes of retirement savings
Adjustable rate mortgage (ARM) - CORRECT ANSWER - (ARM) A mortgage that
permits the lender to periodically adjust the interest rate to reflect fluctuations in the cost of
money.
auto insurance - CORRECT ANSWER - Insurance to protect a car owner in the event of
an accident or damage to a vehicle.
budget - CORRECT ANSWER - A detailed plan of income and expenses expected over a
certain period of time
cash flow - CORRECT ANSWER - the difference between cash coming in and cash going
out of a business
certificate of deposit - CORRECT ANSWER - a certificate issued by a bank to a person
depositing money for a specified length of time.
city income tax - CORRECT ANSWER - A tax assessed and levied by a local authority
such as a county or municipality.
