Learn About Budgets Accounting Trivia!

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| By Kristyferran

Kristyferran

Community Contributor

Quizzes Created: 1 | Total Attempts: 342

Questions: 9 | Attempts: 346 | Updated: Mar 16, 2023

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We love budgets. We love Gross vs net income. Play this quiz and learn this accounting quiz!

Questions and Answers

1.

What is the difference between gross vs net pay?
- A.
  
  Gross is the amount of money you get after taxes Net is before taxes
- B.
  
  Gross and Net amounts are pretty much the same when you make between $40,000.00 and $60,000.00 every year.
- C.
  
  Net is the amount of money after taxes Gross is the amount before taxes no matter how much money you make.
- D.
  
  Net is the amount of money after taxes gross is the amount before taxes only when you make more than $20,000.00.
- E.
  
  None of the Above
Correct Answer
C. Net is the amount of money after taxes Gross is the amount before taxes no matter how much money you make.

Explanation
The correct answer explains that net pay is the amount of money received after taxes have been deducted, while gross pay is the amount before any taxes have been taken out. This is true regardless of the amount of money one earns. Therefore, the answer accurately distinguishes between gross and net pay.

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2.

Murtle is paid biweekly. In each two-week period, she works 64 hours and earns $15.15 per hour. She is married, and she and her husband have one child.The Social Security deduction is 6.2% and the Medicare deduction is 1.45%. State and federal taxes are also deducted. Help Murtle calculate the deductions from her paycheck. State taxes : ____________$75.98________________________________ Federal taxes: __________$50.45________________________________How much is Murtles paycheck every 2 weeks after all of her taxes is taken out
- A.
  
  About $900.00
- B.
  
  About $970.00
- C.
  
  About $770.00
- D.
  
  About $550.00
- E.
  
  About $850.00
Correct Answer
C. About $770.00

Explanation
To calculate Murtle's paycheck after all deductions, we need to calculate the total deductions first. The Social Security deduction is 6.2% of her earnings, which is 0.062 * (64 * $15.15). The Medicare deduction is 1.45% of her earnings, which is 0.0145 * (64 * $15.15). The state taxes deduction is given as $75.98 and the federal taxes deduction is given as $50.45. Adding up all these deductions, we get the total deductions as $75.98 + $50.45 + Social Security deduction + Medicare deduction. Subtracting the total deductions from the total earnings, which is (64 * $15.15), we get Murtle's paycheck every 2 weeks after all taxes are taken out, which is about $770.00.

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3.

1. Chad makes $150,000.00 per year salary at his job. What is the maximum amount of money that Chad should have in a monthly debt payments (back-end)?
- A.
  
  $54,000.00
- B.
  
  $6000.00
- C.
  
  $4500.00
- D.
  
  None of the above
Correct Answer
C. $4500.00

Explanation
Chad's maximum monthly debt payments (back-end) should be $4500.00. This is because the back-end ratio is calculated by dividing the total monthly debt payments by the monthly gross income. In this case, Chad's annual salary is $150,000.00, so his monthly gross income would be $12,500.00. The maximum back-end ratio recommended is typically 36%, which means that the total monthly debt payments should not exceed 36% of the monthly gross income. Therefore, 36% of $12,500.00 is $4500.00, making it the correct answer.

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4.

Moe makes $42,000.00 per year at her job. What is the maximum amount of money per month that Moe should have according to the (front-end)?
- A.
  
  $980.00
- B.
  
  $1,100.00
- C.
  
  $11,760.00
- D.
  
  None of the Above
Correct Answer
A. $980.00

Explanation
Moe makes $42,000 per year at her job. To calculate the maximum amount of money per month, we divide her annual salary by 12 (months in a year). Therefore, $42,000 / 12 = $3,500. The front-end ratio is typically 28% of the monthly income. So, 28% of $3,500 is (0.28 * $3,500) = $980.00. Therefore, the maximum amount of money per month that Moe should have according to the front-end is $980.00.

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5.

Molly and her husband make a combined gross salary of $210,000.00. They have car payments of $500.00 and $320.00. They also have a credit card payment of $200 per month. They have $600 student loan payments. According to the front-end ratio, how much can they pay monthly for a home loan?
- A.
  
  $10,000.00
- B.
  
  $58,800.00
- C.
  
  $4,900.00
- D.
  
  None of the Above
Correct Answer
C. $4,900.00

Explanation
The front-end ratio is a measure used by lenders to determine how much of a borrower's income can be allocated towards housing expenses. It is calculated by dividing the total monthly housing expenses by the gross monthly income. In this case, Molly and her husband have a combined gross salary of $210,000.00. Their monthly housing expenses include car payments ($500.00 + $320.00), credit card payment ($200.00), and student loan payments ($600.00), which totals to $1,620.00. Therefore, according to the front-end ratio, they can pay a maximum of $1,620.00 for their home loan. None of the given answer options accurately represent this amount.

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6.

Molly and her husband make a combined gross salary of $210,000.00. They have car payments of $500.00 and $320.00. They also have a credit card payment of $200 per month. They have $600 student loan payments. According to the back-end ratio, how much of a payment could they have for a new home?
- A.
  
  $75,600.00
- B.
  
  $6,300.00
- C.
  
  $4,680.00
- D.
  
  $5,280.00
- E.
  
  None of the Above
Correct Answer
C. $4,680.00

Explanation
Molly and her husband's combined gross salary is $210,000.00. They have car payments of $500.00 and $320.00, a credit card payment of $200 per month, and $600 student loan payments. The back-end ratio is a measure of the maximum percentage of their gross income that can be used for debt payments, including a mortgage. To calculate this, we subtract their total monthly debt payments ($500 + $320 + $200 + $600 = $1,620) from their monthly gross income ($210,000 / 12 = $17,500), and then multiply the result by 0.28 (the maximum back-end ratio). Therefore, the maximum monthly payment they could have for a new home is $17,500 * 0.28 - $1,620 = $4,680.00.

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7.

1. In Numbers (the spreadsheet application) you start every formula with
- A.
  
  A dollar sign
- B.
  
  An equals sign
- C.
  
  The cell letter and number you want to start with
- D.
  
  All of the above
- E.
  
  None of the above
Correct Answer
B. An equals sign

Explanation
In Numbers (the spreadsheet application), you start every formula with an equals sign. This is because the equals sign indicates to the program that you are entering a formula and not just a regular value. By starting a formula with an equals sign, you are instructing Numbers to perform a calculation or operation based on the values or functions that follow the equals sign.

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8.

If the Regular Expense Total was in cell B24 and the Discretionary Expense Total was in B34 what would the formula look like for Total Expenses:
- A.
  
  =B24+B34
- B.
  
  B24+B34=
- C.
  
  B24+B34
- D.
  
  None of the Above
- E.
  
  A and B would work
Correct Answer
A. =B24+B34

Explanation
The formula for Total Expenses would be "=B24+B34". This formula adds the Regular Expense Total (in cell B24) and the Discretionary Expense Total (in cell B34) together to calculate the total expenses.

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9.

My ________________should = my ____________________ to create something that is called a balanced budget
- A.
  
  Gross income,Net income
- B.
  
  Total expenses, Gross income
- C.
  
  Net income, total expenses
- D.
  
  Regular expenses and Discretionary Expenses, Net Income
- E.
  
  Both c and d
Correct Answer
E. Both c and d

Explanation
To create a balanced budget, it is important for my net income to equal my total expenses. This means that after deducting all regular and discretionary expenses from my net income, the result should be zero. Both option C (net income, total expenses) and option D (regular expenses and discretionary expenses, net income) correctly represent this concept.

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Current Version
Mar 16, 2023

Quiz Edited by
ProProfs Editorial Team
Nov 13, 2009

Quiz Created by
Kristyferran

Learn About Budgets Accounting Trivia!

What is the difference between gross vs net pay?

1. Chad makes $150,000.00 per year salary at his job. What is the maximum amount of money that Chad should have in a monthly debt payments (back-end)?

Moe makes $42,000.00 per year at her job. What is the maximum amount of money per month that Moe should have according to the (front-end)?

Molly and her husband make a combined gross salary of $210,000.00. They have car payments of $500.00 and $320.00. They also have a credit card payment of $200 per month. They have $600 student loan payments. According to the front-end ratio, how much can they pay monthly for a home loan?

Molly and her husband make a combined gross salary of $210,000.00. They have car payments of $500.00 and $320.00. They also have a credit card payment of $200 per month. They have $600 student loan payments. According to the back-end ratio, how much of a payment could they have for a new home?

1. In Numbers (the spreadsheet application) you start every formula with

If the Regular Expense Total was in cell B24 and the Discretionary Expense Total was in B34 what would the formula look like for Total Expenses:

My ________________should = my ____________________ to create something that is called a balanced budget

My should = my ____ to create something that is called a balanced budget