Financial Literacy Test

Teacher Key

  1. List the 5 steps in the Decision Making Process
  2. Identity the problem
  3. Gather information and list possible alternatives
  4. Consider consequences of each alternative
  5. Select the best course of action
  6. Evaluate the results
  1. Financial planning is a ___thinking process______that helps achieve goals
  1. List the five steps in creating a Financial Plan?
  2. Determine your current financial situation
  3. Develop your financial goals
  4. Identify your options
  5. Evaluate your alternatives
  6. Create and use your financial plan of action
  1. What does a SMART goal stand for?
  2. Specific
  3. Measurable
  4. Attainable
  5. Realistic
  6. Time-Limited
  1. What is Gross Income?
  2. Hours times rate of pay
  1. What is Net Income?
  2. Gross income minus tax deduction
  1. What are the four taxes employers must deduct from your paycheck?
  2. Federal Withholding
  3. FICA
  4. Medicare
  5. Utah State Withholding
  1. What does FICA stand for?
  2. Federal Insurance Contribution Act
  1. What is a W-4 used for?
  2. Used to tell employer payroll department the amount of allowances for employee.
  1. What is an I-9 used for?
  2. Evidence of illegible work status
  1. What does a W-2 show?
  2. Reports taxable income and taxes withheld
  1. How is a 1040 EZ different from a 1040?
  2. Shorter version of 1040
  1. What is an Entrepreneur?
  2. Self-employed person
  1. What is a spending plan?
  2. A tool used to record and track projected and actual income and expenses over a period of time.
  3. Also called a budget.
  1. What is a check?
  2. Access to funds in checking account
  1. What does it mean when you bounce a check?
  2. Insufficient funds
  1. What is a checking account register?
  2. Tracks checking account transactions
  1. What does ATM stand for?
  2. Automated Transaction Machine
  1. What is a Debit Card?
  2. Checking account access using card
  1. What is a PIN?
  2. Personal Information Number
  1. What is Direct Deposit?
  2. Paycheck deposit directly from employer to employee checking account
  1. What is Bankruptcy?
  2. All debt removed
  1. What is Debt?
  2. Amount owed to company
  1. What is the Time Value of Money mean?
  2. Money value in the future
  1. What is insurance?
  2. Damage coverage
  1. What is an insurance premium?
  2. Amount paid for insurance coverage
  1. What is compound interest?
  2. Interest amount growing over period of time
  1. Banks and Credit Unions are FOR PROFIT
  2. True
  3. False
  1. Define the word Usury.
  2. The illegal action or practice of lending money at unreasonably high rates of interest.
  1. Damon Williams loved to buy New Balance basketball shoes.
  2. True
  3. False

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