Chapter 4 Quiz

What is gross pay?

• The amount of money received after deductions have been taken

• The amount of money earned by an employee

• A type of retirement plan into which an employee contributes money from each paycheck

What does the term 'deduction' refer to in the context of a paycheck?

• The money a bank pays you for keeping your money there

• Money taken from gross pay for things such as taxes, health insurance, or union dues

• A reduction in your income tax for each person you support, including yourself

What is an exemption?

• The money a bank pays you for keeping your money there

• A federal tax form that shows your income for a year

• A reduction in your income tax for each person you support, including yourself

What is a 401(k) plan?

• A way to save money; the purchase price of a savings bond is repaid with interest when the bond is sold

• A type of retirement plan into which an employee contributes money from each paycheck; employers may also make a contribution

• A federal tax form that shows your income for a year

Which payroll deduction varies depending on the state you live in?

• Federal income tax

• State income tax

• Social Security

If Julie's gross pay is $1,008.71 and her deductions total $386.00, what is her net pay?

• $622.71

• $1,394.71

• $386.00

Roger's deductions are 44% of his gross pay. What percent of his gross pay is his net pay?

• 56%

• 100%

• 50%

Carl earns $27,785 a year and has $7,505 in exemptions and tax deductions. What is Carl's taxable income if he also earns $15 in interest on savings?

• $20,295

• $20,280

• $27,770

What is 5% of $135?

• $6.75

• $6.25

• $5.75

Compute $76.80 + $49.

• $125.80

• $126.80

• $123.80