Multiple Choice
Identify the choice that best completes the statement or
answers the question.
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1.
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Russell went skiing over the weekend with some
friends. He was injured during this trip in a skiing accident. He won’t be able to return to
work for some time. What type of insurance could he use to replace his income during the time he
won’t be able to work?
A. | health insurance | C. | life
insurance | B. | disability insurance | D. | dental
insurance |
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2.
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Jay is collecting worker’s
compensation. What qualifies him to be able to collect worker’s
compensation?
A. | He does not have Social Security. | C. | He works for the government. | B. | He was injured at home. | D. | He was injured on
the job. |
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3.
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Elaine has just been hired for her first job after
graduating college, and is completing her hiring paperwork. She is excited about her new job
because of the benefits it will provide for her and her family. What form will Elaine use to
declare the number of dependents so her employer can withhold the correct amount of federal income
tax from her pay?
A. | W-2 Form | C. | W-4
Form | B. | 1040EZ | D. | 1099 |
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4.
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Brianna has been hired by the Parkston Accounting
Firm as an accountant. She has completed a W-4 form to declare her exemptions. She has claimed three
(3) exemptions. What impact does it have on her net pay?
A. | She will have less taxes taken from her gross
pay. | C. | She will not have any taxes taken from her net
pay. | B. | She will have more taxes taken from her gross
pay. | D. | She will have to pay taxes at the end of the
year. |
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5.
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Paige and Bryan are married. They have income from
working jobs. They have 3 children ages, 2, 5 and 7. Which tax form would they use to file
their federal income taxes?
A. | 1040EZ | C. | 1040B | B. | 1040 | D. | 1040A |
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6.
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Jayce is married with 2 children. How many
allowances can she claim on her W-4?
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7.
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Consumers must pay this type of tax on the purchase
price of consumer goods and services. It is a percentage of the cost of the purchase price. What type
of tax is being paid?
A. | luxury tax | C. | sales
tax | B. | property tax | D. | excise
tax |
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8.
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Katie has the flu and must stay home from work.
What benefit would she be able to use during this time?
A. | personal leave | C. | overtime | B. | holiday | D. | sick leave |
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9.
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Wilma owns and manages her own catering business.
Which tax form should she use to file her return?
A. | 1040EZ | C. | 1040B | B. | 1040 | D. | 1040A |
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10.
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Louie gets paid biweekly. He works 80 hours during
that time period and is paid $14.50 per hour. If he works anything over 80 hours during that time
period he will earn overtime pay. His overtime rate is 1 1/2 times his regular rate. What was
Louie’s gross pay for the pay period of January 20 to January 31, in which he worked 82
hours?
A. | $1,160.00 | C. | $1,198.75 | B. | $1,189.00 | D. | $1,203.50 |
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11.
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Employees have to complete a W-4 upon hire. What is
the purpose of a W-4 Form?
A. | It allows an employee to declare their number of
exemptions. | C. | It all allows an employee to set additional withholdings
to be deducted from pay. | B. | It allows the
appropriate amount of taxes to be deducted from a paycheck. | D. | It allows for all
of the above actions. |
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12.
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Adam is in a panic, he
has just learned that he needs to file his federal income tax return, and he has no clue has to what
to do. He needs your help. Which of the following suggestions would be in his best
interest?
A. | He should gather his W-2 forms and the current
appropriate tax forms. | C. | He should mail his W-2 forms to the
Internal Revenue Service and ask them to complete his tax form. | B. | He should throw away his W-2 forms and forget about filing his
taxes. | D. | He should gather his current W-2 forms and any old tax
form. |
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13.
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Rita is examining her paycheck stub. She pays the
following taxes, Social Security, Medicare, State Income Tax and Federal Income Tax. Which of those
taxes would Rita be able to receive a benefit from when she reaches age 62?
A. | Medicare Tax | C. | State
Income Tax | B. | Social Security
Tax | D. | Federal Income Tax |
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14.
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Betty wants to file her Federal Income Tax, but is
waiting to receive her W-2 Form from her employer. By what date must Betty’s employer give her
the W-2 Form?
A. | December 31 | C. | March
31 | B. | January 31 | D. | May
31 |
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15.
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Chandler owns 10 acres. He built a house and a
garage on the property. He must pay taxes on the land and the buildings. What type of tax will he
pay?
A. | luxury tax | C. | sales
tax | B. | property tax | D. | excise
tax |
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16.
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Reba is a senior in high school, she works
part-time at the Dress It Up. She is single, and has earned $5,000, and has $25 in
interest income. What tax form would she use to file for a refund of her federal
taxes?
A. | 1040EZ | C. | 1040B | B. | 1040 | D. | 1040A |
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17.
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William and Tia Anderson are filing their Federal
Income Tax Return. They are newlyweds, so this is the first time that they will have filed a joint
tax return. They are confused by the definition of a dependant. What definition best defines
dependent for their tax filing purposes?
A. | It is someone that the taxpayer supports
financially. | C. | It is someone that the taxpayer has lived
with. | B. | It is someone that the taxpayer has known for
years. | D. | It is someone that the taxpayer doesn’t
know. |
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Use Gloria’s paystub to answer questions 18 through 22.
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18.
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Consider the deductions that are taken from
Gloria’s paycheck. Which of the following deductions is a required deduction?
A. | Life Insurance | C. | Federal Income Tax | B. | Health
Insurance | D. | 401(K) |
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19.
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In examining Gloria’s check stub, what is the
total of her optional deductions?
A. | $64.00 | C. | $214.00 | B. | $98.27 | D. | $248.27 |
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20.
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Which of the deductions could Gloria eliminate if
she wanted to increase her take-home pay?
A. | Social Security Tax | C. | State Income Tax | B. | Medicare
Tax | D. | Life Insurance |
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21.
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What is the total of Gloria’s current
required deductions for the pay period?
A. | $161.75 | C. | $346.02 | B. | $196.02 | D. | $398.02 |
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22.
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Which of the taxes that are deducted from
Gloria’s paycheck would she be able to get a refund of through her Federal Income Tax
Return?
A. | State Income Tax | C. | Medicare Tax | B. | Social Security
Tax | D. | Federal Income Tax |
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23.
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Calculate Gloria’s net pay for the pay
period.
A. | $601.98 | C. | $641.98 | B. | $629.98 | D. | $693.98 |
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24.
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Harley contributes part of his monthly earnings to
an account for retirement. What type of plan is he contributing to?
A. | cafeteria plan | C. | profit-sharing plan | B. | retirement
plan | D. | health savings plan |
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25.
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Marcus is learning about public services that are
funded by taxes. Which of the following services would NOT be paid for by taxes?
A. | Maintenance of roads and bridges. | C. | Employee computer purchases. | B. | Police and fire protection. | D. | Public
transportation. |
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