Understanding the functions of money

Pre-test

Using the knowledge you already have, please answer the questions below. We will
have a class discussion following the pre-test.

1. What is Gross pay and what is Net Pay?

2. What is taxation and why do we need it?

3. List 4 sources of income a person can have. There are many more than 4, so
list as many as you can, with at least 4.

4. Using this data from an example pay stub, please calculate the Net Pay.

a. Wages: 576.56
b. Federal income tax: $86.48
c. State Tax : $43.25
d. Social Security Tax: 7.50
e. Medicare: $5.25

5. What is the importance of setting personal financial goals?

6. What is a cash budget and what is it used for?

7. What is the benefit of financial literacy and knowing how money works?

8. What is a Cost/Benefit analysis?

9. Describe what a loan is and the different types offered. What is the process
one would take to get a loan?

10. How is accounting information used to allocate resources in a business?

Give one example of this process.