This document contains 22 multiple choice questions and answers about financial management and accounting. It covers topics like income, expenses, payroll, taxes, and reconciling bank accounts. The questions test understanding of key concepts such as distinguishing between fixed and variable expenses, calculating gross pay and overtime, and determining deductions from a paycheck.

1. Financial Management
Units 1 - 3
1

2. 2
Question #1

3. 3
Answer #1
The correct answer is B. Financial Planning includes
knowing where a person spends their money so that a
detailed budget can be made.

4. 4
Question #2

5. 5
Answer #2
The correct answer is D. Needs are things that a person
must have to live. Food is something a person must have.

6. 6
Question #3

7. 7
Answer #3
The correct answer is C. While an increase in the credit
limit on a credit card might provide a person with the
option to spend more money, this is still money that must
be repaid, therefore it is not income.

8. 8
Question #4

9. 9
Answer #4
The correct answer is A. Fixed expenses are ones that do
not change from month to month. Rent on an apartment
is the same each month and therefore it is a Fixed
expense.

10. 10
Question #5

11. 11
Answer #5
The correct answer is D. Variable expenses are ones that
change each month. Compare the two tables to find the
amounts that change from one month to the next.

12. 12
Question #6

13. 13
Answer #6
The correct answer is C. Income is money that comes to a
person typically earned by working.

14. 14
Question #7

15. 15
Answer #7
The correct answer is C. Expenses are items that cost
money. The only item in this list that costs money is C,
getting haircuts at a salon.

16. 16
Question #8

17. 17
Answer #8
The correct answer is B. Credit Card purchases are not
related to a person’s checking account.

18. 18
Question #9

19. 19
Answer #9
The correct answer is D. The Federal Reserve is not a
commercial bank or lending institution. The Federal
Reserve is the federal banking system that all commercial
banks must join.

20. 20
Question #10

21. 21
Answer #10
The correct answer is A. The most recent statement from
the bank shows the balance as of a certain date. Any
transactions that have happened since that time must be
added or subtracted to that balance. Checks are
subtracted and deposits are added.

22. 22
Question #11

23. 23
Answer #11
The correct answer is B. Balancing a checkbook means
that you are reconciling all the payments and deposits into
and out of the checking account.

24. 24
Question #12

25. 25
Answer #12
The correct answer is C. Interest is ‘earned’ by the account
each month. The interest is paid into the account by the
bank.

26. 26
Question #13

27. 27
Answer #13
The correct answer is A. The W-2 form is sent to each
employee as a record of their wages for the year. This
income is what must be reported on a tax return.

28. 28
Question #14

29. 29
Answer #14
The correct answer is C. The Internal Revenue Service (IRS)
offers free help and filing through their website,
www.irs.gov

30. 30
Question #15
Which form would contain information necessary to
complete a 1040 federal income tax return?
A) W – 4
B) W – 2
C) NC – 4
D) 1099-MISC

31. 31
Answer #15
The correct answer is B. A 1040 form can be filed by
anyone who has income from a job. This is reported on a
W-2 form.

32. 32
Question #16

33. 33
Answer #16
The correct answer is A. A citizen that does not follow tax
laws can have fines levied against them. They can be put
in prison for non-payment of taxes, and they can have
their wages withheld (garnished) by the government. They
cannot, however, have their driver’s license taken away
from them for that reason.

34. 34
Question #17

35. 35
Answer #17
The correct answer is B. Gross Pay is defined as the
amount earned before any deductions are subtracted.

36. 36
Question #18

37. 37
Answer #18
The correct answer is D. Michael worked 40 regular hours
and 7 hours and 20 minutes over overtime. He reports 7
hours and of overtime. 15 minutes is ¼ of an hour. So
Michael has worked 47.25 hours. To calculate Michael’s
Regular pay: 40 x $11.20 = $448.00; Michael’s Overtime
pay: 7.25 x ($11.20 x 1.5) = 7.25 x $16.90 = $12.80;
Michael’s gross pay: Regular Pay + Overtime Pay = $560.80

38. 38
Question #19

39. 39
Answer #19
The correct answer is C. Hours x Hourly Wage = Gross
Earnings. This means that we need to divide $446.50 by
38 hours to find the hourly wage. $446.50 / 38 = $11.75

40. 40
Question #20

41. 41
Answer #20
The correct answer is B. Henry’s gross pay is $11 x 40 =
$440.00. Multiply the gross pay by 10% to calculate the
amount of the tax deduction. 10% = 0.10. $440.00 x 0.10
= $44.00; Subtract the tax deduction from the gross pay to
calculate the next pay $440.00 = $44.00 = $396.00

42. 42
Question #21

43. 43
Answer #21
The correct answer is D. The Gross pay for one week of 35
hours at $8.78 x 35 = $307.30. The total gross pay for 48
weeks at this rate is 48 x $307.30 = $14,750.40

44. 44
Question #22

45. 45
Answer #22
The correct answer is D. Nurses are required in many
places to wear a uniform. This is an example of a job-
related expense.