Chapter 18

Question 1

personal financial
management…

Answer 1

is a process used by individuals to manage limited income to meet personal unlimited needs and wants

Question 2

financially capable…

Answer 2

means having the ability to understand basic topics related to finance

Question 3

earned income…

Answer 3

is the income received from employment or from self-employment

Question 4

minimum wage

Answer 4

is the lowest hourly wage employers can pay most workers by law

Question 5

overtime wage

Answer 5

is the amount paid for working time in a
week that is beyond the standard 40 hour workweek

Question 6

tip

Answer 6

is money paid for service beyond the payment that is required; gratuity

Question 7

payroll deduction

Answer 7

is a subtraction from gross pay

Question 8

gross pay

Answer 8

is total income before payroll deductions

Question 9

net pay

Answer 9

is gross pay minus payroll deductions

Question 10

Form W-4

Answer 10

Is the Employee’s Withholding Certificate that helps an employer determine how much income tax to withhold from an employee’s paychecks as payroll deduction

Question 11

FICA taxes

Answer 11

are paid by employees and employer to finance Social Security and Medicare programs

Question 12

fixed expense

Answer 12

is equal in amount each budget period

Question 13

variable expense

Answer 13

can go up and down during the budget period

Question 14

variance

Answer 14

can be favorable or unfavorable