Chapter 2 Vocab

Question 1

benefits

Answer 1

forms of compensation in addition to salary or wages

Question 2

commission

Answer 2

a set fee or percentage of a sale paid to an employee instead of or in addition to salary of wages

Question 3

disposable income

Answer 3

money available to spend or save after taxes have been paid

Question 4

minimum wage

Answer 4

the lowest pay rate allowed by law for each regular hour of work

Question 5

overtime pay

Answer 5

pay received for hours worked in addition to regular hours

Question 6

personal leave

Answer 6

paid time away from work for personal reasons

Question 7

profit sharing

Answer 7

a benefit that allows employees to share a portion of the business’s profits

Question 8

retirement plan

Answer 8

an account into which employees voluntarily contribute a portion of their earnings for their retirement; employers may match these contributions

Question 9

sick leave

Answer 9

paid time away from work due to illness

Question 10

dividends

Answer 10

a portion of a corporation’s profits distributed to shareholders

Question 11

excise tax

Answer 11

a tax charged on the purchase of specific goods and services

Question 12

in-cash payments

Answer 12

money in the form of a check, a debit card, or other direct payment given to a person needing assistance

Question 13

in-kind payments

Answer 13

payments made indirectly on a person’s behalf or paid in a form other than money

Question 14

interest

Answer 14

money earned on savings accounts and other funds

Question 15

property tax

Answer 15

a wealth tax based on the assessed value of owned real estate

Question 16

public goods

Answer 16

government provided goods and services paid for by taxes

Question 17

sales tax

Answer 17

a tax levied as a percentage of the purchase price of goods and services sold to consumers

Question 18

transfer payments

Answer 18

money and benefits received from local, state, or federal governments

Question 19

unearned income

Answer 19

money received from sources other than working

Question 20

use tax

Answer 20

a tax charged on the use, storage, or consumption of a good that was purchased in one state but used in another state

Question 21

dependent

Answer 21

a person who depends on you for more than half of his or her support

Question 22

exemption

Answer 22

a person claimed as a dependent on a tax return; property that a debtor in bankruptcy does not have to forfeit to pay off creditors

Question 23

Form 1040EZ

Answer 23

the short tax return form designed for single and joint filers with no dependents or itemized deductions

Question 24

Form W-2

Answer 24

a form used to report taxable income that a worker received during the calendar year

Question 25

gross pay

Answer 25

total salary or wages earned during a pay period

Question 26

medicare tax

Answer 26

a tax that pays for medical care for retired persons age 65 and older who receive Social Security benefits

Question 27

net pay

Answer 27

the amount of your paycheck after deductions

Question 28

social security

Answer 28

a withholding tax that pays for Old Age, Survivors, and Disability Insurance (OASDI) benefits

Question 29

worker’s compensation

Answer 29

an insurance plan that pays medical and disability benefits to employees injured on the job