1.
To calculate an employeeâ€™s time-and-a-half pay rate
Correct Answer
D. Multiply the regular pay rate by 1.5
Explanation
To calculate an employee's time-and-a-half pay rate, you need to multiply the regular pay rate by 1.5. This is because time-and-a-half pay means the employee is entitled to receive one and a half times their regular pay rate for the additional hours worked. Multiplying the regular pay rate by 1.5 ensures that the employee is compensated accordingly for their overtime or extra hours worked.
2.
Which of the following is NOT a step in finding the gross wages for an employee who has worked both regular time and overtime hours?
Correct Answer
A. Find the employee’s average annual income over the past 3 years
Explanation
Calculating gross wages for an employee who has worked both regular time and overtime hours involves finding the overtime pay rate, adding regular-time pay and overtime pay, and determining the number of regular-time and overtime hours worked. However, finding the average annual income over the past 3 years is not a step in determining gross wages for a specific pay period.
3.
Which of the following describes how to calculate net pay?
Correct Answer
C. Subtract the total deductions from the gross pay.
Explanation
To calculate net pay, you need to subtract the total deductions from the gross pay. Net pay is the amount of money an employee takes home after all the deductions such as taxes, insurance, and retirement contributions have been subtracted from their gross pay. By subtracting the total deductions from the gross pay, you can determine the actual amount of money that the employee will receive in their paycheck.
4.
In a graduated tax system,
Correct Answer
D. The tax rate gets higher as taxable income gets larger.
Explanation
In a graduated tax system, the tax rate gets higher as taxable income gets larger. This means that individuals with higher incomes are required to pay a higher percentage of their income in taxes compared to those with lower incomes. This progressive tax system is designed to promote income equality and ensure that those who earn more contribute a larger share of their income towards taxes.
5.
Which of the following best describes how compound interest works?
Correct Answer
B. The compound interest rate increases as the term progresses
Explanation
Compound interest works by calculating interest not only on the initial principal amount, but also on the accumulated interest from previous periods. This means that as the term progresses, the interest earned in each period is added to the principal, and future interest is calculated based on the new, higher amount. As a result, the compound interest rate increases over time, leading to greater overall growth of the investment.
6.
If the principal and the amount of interest for one year are known, the rate of interest can be found by
Correct Answer
C. Dividing the interest for one year by the principal.
Explanation
To find the rate of interest, you need to divide the interest for one year by the principal. This is because the rate of interest is calculated by dividing the interest earned by the principal amount. By dividing the interest for one year by the principal, you can determine what percentage of the principal is being earned as interest in one year.
7.
The purchase price of a new van was $22,980. The sales tax rate in the state was 5.5%, and registration fees came to $133. There was also a $1,500 manufacturer’s rebate on the van. If the customer put a down payment of $2,200 toward the purchase, what was the delivered price?
Correct Answer
A. $20,676.90
Explanation
The delivered price of the new van is calculated by considering several factors. First, the sales tax is determined by multiplying the purchase price ($22,980) by the sales tax rate (5.5%). This results in a sales tax of $1,263.90. Additionally, registration fees of $133 are added to the total cost. The manufacturer's rebate of $1,500 is then subtracted from this total.
The remaining cost after the rebate is $22,876.90. Finally, the down payment of $2,200 is subtracted from this amount to find the delivered price. Therefore, the delivered price of the van, after accounting for sales tax, registration fees, manufacturer's rebate, and the down payment, is $20,676.90.
8.
Michael Valerski had these cash receipts for the week of September 12: paycheck, $562.14; mail in rebate, $75; birthday gift, $100; refund from returned merchandise, $42.67. Complete a cash receipts record to find Michael’s total receipts for the week.
Correct Answer
A. $779.81
Explanation
To find Michael's total receipts for the week, we need to add up all the cash receipts mentioned. Adding $562.14 (paycheck) + $75 (mail in rebate) + $100 (birthday gift) + $42.67 (refund from returned merchandise), we get a total of $779.81. Therefore, the correct answer is $779.81.
9.
A deposit slip lists these items: (bills) 8 fifties, 22 twenties, 9 tens, 30 fives; (coins) 24 dimes, 18 nickels, 90 pennies; (checks) $45.67, $99.12. The depositor received no cash back. What total deposit was made?
Correct Answer
A. $1,228.99
Explanation
The correct answer is $1,228.99. This is the total sum of all the items listed on the deposit slip, which includes the bills, coins, and checks. Adding up the bills, we have 8 fifties (8 * $50 = $400), 22 twenties (22 * $20 = $440), 9 tens (9 * $10 = $90), and 30 fives (30 * $5 = $150), which gives us a total of $1,080. For the coins, we have 24 dimes (24 * $0.10 = $2.40), 18 nickels (18 * $0.05 = $0.90), and 90 pennies (90 * $0.01 = $0.90), which gives us a total of $4.20. Finally, adding the checks $45.67 and $99.12 gives us $144.79. Adding up the totals for the bills, coins, and checks, we get $1,080 + $4.20 + $144.79 = $1,228.99.
10.
Todd Smith paid $891.75 in interest on a 9-month note for $8,200. What rate of interest did Todd pay on the note?
Correct Answer
B. 14.5
Explanation
Todd Smith paid $891.75 in interest on a 9-month note for $8,200. To find the rate of interest, we can use the formula: interest = principal * rate * time. Plugging in the given values, we have 891.75 = 8200 * rate * (9/12). Solving for the rate, we get rate = 891.75 / (8200 * (9/12)) = 14.5. Therefore, Todd paid an interest rate of 14.5% on the note.
11.
A bank loaned Peggy Chalmers $3,000 at 13.5% ordinary interest for 90 days. Find the amount of interest she owed on the loan.
Correct Answer
C. $101.25
Explanation
Peggy Chalmers borrowed $3,000 from the bank at an interest rate of 13.5% per year. Since the loan is for 90 days, we need to calculate the interest for this period. To find the interest, we can use the formula: Interest = Principal * Rate * Time. Plugging in the values, we get: Interest = $3,000 * 0.135 * (90/365). Simplifying this equation, we find that the interest owed on the loan is approximately $101.25.
12.
Which method are most companies LEAST likely to use to record the number of hours their employees work?
Correct Answer
D. Employees keep track of their hours worked mentally.
Explanation
Most companies are least likely to use the method of employees keeping track of their hours worked mentally because it is prone to errors and can easily be manipulated. Using a mental tracking system does not provide any concrete evidence or documentation of the actual hours worked, making it difficult for companies to accurately calculate and record employee hours for payroll and other purposes.
13.
Which type of employee is most likely to earn a base salary plus commission?
Correct Answer
C. A salesperson
Explanation
A salesperson is most likely to earn a base salary plus commission because their job is directly related to selling products or services. Commission is a common incentive for salespeople to encourage them to meet or exceed sales targets. This type of compensation structure motivates salespeople to work harder and generate more sales, as their earnings are directly tied to their performance. In contrast, a construction worker, waitress, or lawyer typically have different compensation structures that do not involve commission-based earnings.
14.
Which of the following is an example of a job benefit?
Correct Answer
D. All of the above
Explanation
All of the options listed - paid holidays, recreational facilities, and child care - are examples of job benefits. Job benefits are additional perks or advantages that employees receive in addition to their salary or wages. These benefits are provided by employers to attract and retain talented employees and improve their overall job satisfaction. Paid holidays allow employees to have time off work while still receiving their regular pay. Recreational facilities provide employees with access to fitness centers, sports facilities, or other recreational activities. Child care benefits help employees balance their work and family responsibilities by providing assistance or subsidies for child care expenses.
15.
What is the primary reason for writing a budget?
Correct Answer
D. To help allocate future income
Explanation
The primary reason for writing a budget is to help allocate future income. By creating a budget, individuals or organizations can plan and prioritize their spending based on their anticipated income. It allows them to allocate funds for various expenses such as bills, savings, investments, and other financial goals. A budget helps in ensuring that income is utilized effectively and efficiently, enabling individuals or organizations to make informed decisions about their financial resources.
16.
Which of the following statements about state and city income taxes is true?
Correct Answer
C. State and city income tax is based on your federal taxable income.
Explanation
The correct answer is that state and city income tax is based on your federal taxable income. This means that the amount of state and city income tax you owe is calculated using your federal taxable income as a starting point. This is because state and city tax laws often reference the federal tax code and use it as a basis for determining taxable income at the state and local level. Therefore, the amount of income tax you owe to the state and city is directly tied to your federal taxable income.
17.
Which of the following is NOT a heading in a check register?
Correct Answer
A. Interest rate
Explanation
The check register is a document used to track and record transactions related to a bank account. It typically includes headings such as check number, balance, and transaction. However, the interest rate is not a heading in a check register as it pertains to the interest earned or charged on the account balance and is not directly related to individual transactions.
18.
What is the name for the personalized password that each customer must enter before making ATM transactions?
Correct Answer
C. PIN
Explanation
A Personal Identification Number (PIN) is a personalized password that each customer must enter before making ATM transactions. It is a security measure to ensure that only authorized individuals can access their accounts and perform transactions.
19.
Which method are most companies LEAST likely to use to record the number of hours their employees work?
Correct Answer
C. Net deposit
Explanation
Most companies are least likely to use the method of recording the number of hours their employees work as "net deposit." This is because "net deposit" refers to the amount of money an employee receives after deductions such as taxes and other withholdings have been taken out. It does not directly correlate with the number of hours worked. Other methods such as "total deposit," "final deposit," or "gross deposit" are more commonly used to record the number of hours worked by employees.
20.
Which of the following reasons best describes why a seller adds a finance charge to the cash price when calculating the installment price?
Correct Answer
B. To cover the extra cost of doing business on the installment plan.
Explanation
The reason why a seller adds a finance charge to the cash price when calculating the installment price is to cover the extra cost of doing business on the installment plan. When a seller offers installment plans to customers, they incur additional expenses such as administrative costs, credit checks, and potential risks of non-payment. The finance charge helps offset these costs and ensures that the seller can still make a profit while providing the convenience of installment payments to customers.