Question

1. if expenses were to exceed income on a spending plan, what would be a financially smart solution?

a. decrease expenses
b. use a credit card more often
c. earn less income
d. increase purchases

1. diana and aaron have decided to develop a spending plan to help them gain control over their finances. which of the following statements is not true about spending plans?

a. spending plans are used to record planned income.
b. spending plans are used to record planned expenses.
c. a spending plan includes items not usually included when creating a budget.
d. when creating a spending plan, it is recommended that you examine your trade - offs and opportunity costs.

1. when is your spending plan complete?

a. when you have allocated all your income into categories for the month.
b. when you have all of your current income and expenses recorded.
c. spending plans are always under revision so they are never complete.
d. spending plans are complete each december 31st as one year ends and another year begins.

1. chase has decided to work with a spending plan so he can build up an emergency fund for when he is in college. he learned in class that he could probably reduce his spending the most by looking at his non - contractual expenses. which of his expenses best fit that category?

a. cell phone bill, gasoline, and car payment
b. internet bill, entertainment, and clothing
c. motorcycle payment, food, and cell phone bill
d. gasoline, food, and entertainment

1. michael wants to develop a spending plan for himself to use during his final year of high school. what will he need to do as his first step?

a. decide what income and spending categories would reflect his values, needs, and wants.
b. decide how much money he can spend for each of the bills he pays each month.
c. track his current income and expenses. if he has already created an income and expense statement then he has completed this step.
d. develop a control system that will work with his life style.

1. what made the income tax a permanent part of the u.s. tax system?

a. a vote by congress in 1955
b. passage of the 16th amendment to the constitution in 1913
c. an announcement made by the irs (internal revenue service) in 1960
d. none of the above

1. by accurately completing this form when you begin a new job, it can prevent you from overpaying taxes (allowing you to keep more money in each paycheck), and it can ensure you don’t have a big balance due at tax time.

a. form w - 2
b. form w - 4
c. form 1040
d. form 1099

1. the irs recommends that you complete a new form w - 4 every time a major life event occurs, such as

a. marriage
b. birth of a child
c. a spouse gaining or losing a job
d. all of the above

1. you should only receive a form w - 2 if you are

a. an employee
b. an employer
c. a contractual worker
d. a tax preparer

1. what is the first step to take when getting ready to do your income taxes?

a. sign your tax form(s)
b. fill out irs form 1040
c. gather all your documents like w - 2 statements, your social security number, any receipts, etc. that could affect your tax liability you owe the government
d. submit your tax form(s)

1. taxes that individuals pay to federal, state, and local governments can help provide

a. factories to employ workers
b. schools and libraries
c. bridges and roads
d. television stations like espn and hgtv

Explanation:

• Question 25: When expenses exceed income, decreasing expenses is a smart financial move. Using a credit card more (b) increases debt, earning less (c) and increasing purchases (d) worsen the situation.
• Question 26: Spending plans and budgets cover similar items. So, statement c is not true. Spending plans record planned income (a), planned expenses (b), and require considering trade - offs (d).
• Question 27: Spending plans are always evolving. So, they are never truly complete. Option c is correct. Allocating income (a) or recording current info (b) doesn't mean it's final. And they aren't just completed on December 31 (d).
• Question 28: Non - contractual expenses are flexible. Gasoline, food, and entertainment (d) are more flexible than contractual items like cell phone bills (a), internet bills (b), or motorcycle payments (c).
• Question 29: The first step in creating a spending plan is tracking current income and expenses. If an Income and Expense Statement is made, this step is done. So, option c is correct. Deciding on values (a), bill amounts (b), or a control system (d) come later.
• Question 30: The 16th Amendment (b) made the income tax permanent. A 1955 vote (a) and 1960 IRS announcement (c) are incorrect.
• Question 31: Form W - 4 (b) is filled out when starting a new job to manage tax withholding. Form W - 2 (a) is for employees after earning income, Form 1040 (c) is for tax filing, and Form 1099 (d) is for other income reporting.
• Question 32: Major life events like marriage (a), birth of a child (b), or a spouse's job change (c) all require a new Form W - 4. So, option d is correct.
• Question 33: Employees (a) receive Form W - 2. Employers (b), contract workers (c), and tax preparers (d) don't typically receive it in the same way.
• Question 34: Gathering documents (c) is the first step. Signing (a), filling Form 1040 (b), or submitting (d) come later.
• Question 35: Taxes fund public services like schools and libraries (b). Factories (a) are usually private, and while taxes may contribute to some infrastructure (c), schools and libraries are more directly funded. Television stations (d) are private or funded through other means.

Answer:

1. A. Decrease expenses
2. C. A spending plan includes items NOT usually included when creating a budget.
3. C. Spending plans are always under revision so they are never complete.
4. D. Gasoline, food, and entertainment
5. C. Track his current income and expenses. If he has already created an Income and Expense Statement then he has completed this step.
6. B. Passage of the 16th Amendment to the Constitution in 1913
7. B. Form W - 4
8. D. All of the above
9. A. An employee
10. C. Gather all your documents like W - 2 statements, your Social Security number, any receipts, etc. that could affect your tax liability you owe the government
11. B. Schools and libraries