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Exam 3: Earnings and Income: the Building Blocks of Your Financial Journey

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Question 41

Multiple Choice

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Which of the following is an example of earned income?

A) Tips.
B) Loans to others.
C) Dividends from ownership of a business.
D) Deposits in a bank.

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Question 42

Multiple Choice

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Which of the following types of partnership is often used by doctors, attorneys, and accountants?

A) Limited partnership.
B) Limited liability partnership.
C) General partnership.
D) Sole proprietorship.

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Question 43

Multiple Choice

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What is Catherine's total income if she has the following sources of income: $3,500 from her job, $600 in interest from investments, and $1,000 bonus?

Which of the following refers to a partnership where there is a general partner who manages the business and one or more limited partners who simply invest money into the partnership and are not involved in the day-to-day management?

Samuel is starting a delivery business with one delivery truck in which he is the delivery driver. Samuel is using his own money to purchase the truck and does not want to do a lot of paperwork to start his business. Which business structure would best fit his situation?

Which of the following refers to the money you receive from the investments that you have made?

Which of the following is a capital asset?

What is the default legal structure of a self-employed individual?

Which of the following refers to compensation received for services performed for an employer?

Which of the following is the recommended targeted savings rate if you are under age 30?

Which of the following are sources of earned income?

Which of the following refers to personally developed probabilities of potential losses based on expectations, fear, worry, and other factors?

Which of the following is defined as working more than 40 hours in one week?

Which of the following can be measured using probabilities and can often be quite high?

Which of the following refers to having your employer take money automatically from your paycheck and contribute it directly to a retirement savings plan or a savings account?

Which of the following is a payment for a set period of time, typically a year?

To increase your investment income, you should do which of the following?

Which of the following is what employers pay for an employee to work, typically on an hourly basis?

If an individual is self-employed and considered an independent contractor, what percent of Social Security and Medicare taxes is he or she required to pay relative to salaried individuals?

Dominic is attending his second year of college and has paid $3,500 in tuition and fees. How much can he claim for his American Opportunity Tax Credit?