Fin Lit 2 Test Review

John is a financial advisor. He is explaining to his client about different types of income. He mentioned all of the following as examples of earned income EXCEPT:

• net earnings from his client's small business

• dividends from his client's stock investments

• commissions from his client's property sales

• wages from his client's job

John is an employee at a multinational company. He is entitled to various benefits. All of the following are examples of benefits he receives without working EXCEPT:

• sick leave

• profit sharing

• personal leave

• vacation

John has various sources of income. All of the following are examples of unearned income for John EXCEPT:

• interest from his savings account

• government transfer payments he receives

• tips he gets from his part-time waiter job

• dividends from his investments

Consider a public park in your city. Which of the following is true about this public good?

• people do not benefit in direct proportion to taxes paid for its maintenance

• everyone in the city benefits from it

• no one can be excluded from using it

• all of these are characteristics of the public park

John is studying different types of taxes for his economics class. He came across a term 'progressive tax'. Which of the following taxes would John consider as a progressive tax?

• FICA

• sales tax

• Federal income tax

• property tax

John is a property owner and he needs to pay property tax. The amount of tax he needs to pay is based on the property's

• market value

• assessed value

• original cost

• none of these

Consider a scenario where you are working in a company. Which of the following statements regarding the social security tax that you and your employer pay is correct?

• Your company pays the entire amount of social security tax

• Both you and your company each pay half of the social security tax

• As an employee, you are not subject to pay social security tax

• You pay the entire amount of social security tax

John is reviewing his paycheck and notices several deductions. Which of the following is NOT an optional deduction that John might see?

• health insurance

• savings plan

• Medicare

• Life Insurance

John is a worker who wants to report the taxable income he received during the calendar year. Which form should he use?

• W-2

• 1040

• 1040A

• W-4

John, an employee at XYZ Corp, is considering which benefits he values most. Which of the following would be considered a perk?

• Access to the company's fitness center

• Ability to work flexible hours

• Receiving employee discounts on company products

• All of the following