Understanding Taxes and Budgeting

What is the term for money you receive before any taxes are deducted?

• Net income

• Gross income

• Salary

• Paycheck

Which type of tax is applied to goods and services at the point of sale?

• Income tax

• Payroll tax

• Sales tax

• Property tax

What is the term for money you receive after all taxes and deductions have been taken out?

• Gross income

• Net income

• Salary

• Paycheck

Which of the following is a tax on the value of a property, usually levied on real estate?

• Income tax

• Payroll tax

• Sales tax

• Property tax

Which method of payment involves borrowing money that must be paid back, often with interest?

• Check

• Credit card

• Debit card

• Electronic payment

Which type of tax is deducted directly from an employee's paycheck?

• Income tax

• Payroll tax

• Sales tax

• Property tax

What is an advantage of using a debit card over a credit card?

• No interest charges

• Builds credit history

• Offers rewards

• Allows for borrowing

Which of the following is a disadvantage of using a credit card?

• No interest charges

• Builds credit history

• Potential for debt

• Immediate payment

What action can be taken to balance a budget when expenses exceed income?

• Increase expenses

• Decrease income

• Decrease expenses

• Ignore the budget

Which of the following is a fixed expense?

• Groceries

• Rent

• Entertainment

• Dining out