Alabama Financial Literacy Test Review

The total money one gets to "take home" from a paycheck after taxes and deductions are taken out is known as what?

• Gross pay
• Federal Income Tax
• State Income Tax
• Net Pay

Which of the following is the form employers use to determine how much tax to deduct from a paycheck?

• W-2
• I-9
• W-9
• W-4

Which of the following is the form an employer provides to an employee to inform them of how much money was deducted from paychecks in a given year?

• W-2
• I-9
• W-9
• W-4

Which of the following statements best describes gross pay?

• Amount of money one receives from their job before taxes or other deductions are taken out
• Amount of money one receives from insurance after an illness or accident
• Amount of money one receives from their job after taxes or other deductions are taken out
• Amount of money one earns from their job by overtime, bonuses, and reimbursement

Which of the following will be paid for as part of the escrow funds included in a mortgage loan?

• Property Tax
• Car Insurance
• Principal on Home Loan
• Home Warrenty

When seeking to open a bank account, which of the following is needed?

• Government-Issued Identification
• Blank Checks
• Recommendation Letter
• School Transcript

When one is seeking to purchase a product at a store, what additional cost must be paid in addition to the listed price of the product?

• Sales Tax
• Insurance
• Interest
• Purchasing Fee

Which of the following best describes the concept of APR?

• The credit card interest rate, calculated on a yearly basis
• The fee charged if a credit card payment is late
• The maximum amount one can charge on their credit card
• Summary of all credit card transactions in one month

A certificate of deposit (CD) differs from a traditional savings account in what way?

• CDs must remain untouched for a fixed period of time
• CDs have a low interest rate
• CDs include the purchase of stocks
• CDs are a riskier investment

All of the following are advantages of bundling insurance EXCEPT what?

• Increases insurance options
• Convenience
• Less complicated
• Potential saving of money