1. UNIT 3 – Test Review Budgeting and Managing a Checking Account
MONEY MANAGEMENT
UNIT 3 – Test Review
Budgeting and
Managing a Checking Account

2. CHAPTER EIGHT QUESTION: ANSWER: Budget
A plan for spending and saving money
ANSWER:
Budget

3. CHAPTER EIGHT QUESTION: ANSWER:
Name the three major categories included in most budgets?
ANSWER:
Income, Savings, and Expenses

4. CHAPTER EIGHT QUESTION: ANSWER:
Amount of money earned before taxes is known as?
ANSWER:
Gross Income

5. CHAPTER EIGHT QUESTION: ANSWER:
Amount of money earned after taxes is known as?
ANSWER:
Net Income

6. CHAPTER EIGHT QUESTION: ANSWER:
Assuming a Gross Salary of $100,000 and a tax rate of 25%:
What is your Gross Income?
What is your total income tax bill?
What is your Net Income?
ANSWER:
Gross Income = $100,000
Income Taxes = $25,000
Net Income = $75,000

7. CHAPTER EIGHT
QUESTION:
Unspent income is known as?
ANSWER:
Savings

8. CHAPTER EIGHT QUESTION: ANSWER: What are three types of savings?
Short-term (new shoes), Long-Term (house), Retirement, Emergencies

9. CHAPTER EIGHT QUESTION: ANSWER: A cost to meet a need or pay a debt.
Expense

10. CHAPTER EIGHT QUESTION: ANSWER:
There are three types of expenses? What are they?
ANSWER:
Fixed, Variable and Discretionary

11. CHAPTER EIGHT QUESTION: ANSWER: Fixed Expense Rent, Car Payment etc…
A cost that occurs regularly and doesn’t vary in amount is known as a:
Give two examples:
ANSWER:
Fixed Expense
Rent, Car Payment etc…

12. CHAPTER EIGHT QUESTION: ANSWER: Variable Expense
A cost that occurs regularly but varies in amount is known as a:
Give two examples:
ANSWER:
Variable Expense
Phone, Electricity, Groceries etc…

13. CHAPTER EIGHT QUESTION: ANSWER: Discretionary Expense
A cost that is determined by personal wants and needs:
Give two examples:
ANSWER:
Discretionary Expense
Vacations, Entertainment, Clothes

14. CHAPTER EIGHT QUESTION:
The condition of not being able to have ALL of the good and services one wants.
ANSWER:
Scarcity

15. CHAPTER EIGHT QUESTION:
The value of what you had to give up to pursue another option is known as?
ANSWER:
Opportunity Cost

16. CHAPTER EIGHT QUESTION:
Giving up some of one thing to have more of another is known as:
ANSWER:
A tradeoff

17. CHAPTER NINE A checking account QUESTION: ANSWER:
Banking service where you deposit money into it, and can then write drafts to people or businesses to pay off money owed?
ANSWER:
A checking account

18. CHAPTER NINE
QUESTION:
There are a lot of questions you should ask before opening up a checking account? Name one?
ANSWER:
Minimum balance? ATM card? Debit Card? Direct deposit? Free Checks? Etc…

19. CHAPTER NINE QUESTION:
A check that the bank has already processed and paid out?
ANSWER:
Cancelled check (or cleared check)

20. CHAPTER NINE QUESTION:
When you don’t have enough money in your account to cover a check?
ANSWER:
Overdraft (or bounced check)

21. CHAPTER NINE Floating a check QUESTION: ANSWER:
When you know you don’t have enough money to cover a check but you send it anyway, hoping to make a deposit before the check clears.
ANSWER:
Floating a check

22. CHAPTER NINE Signature Card QUESTION: ANSWER:
A form that you fill out when you open your checking account. Provides the bank with a record of how you sign your name.
ANSWER:
Signature Card

23. Parts of a check
NAME
ADDRESS

24. CHAPTER NINE Deposit Slip QUESTION: ANSWER:
A form you fill out when you are depositing money into your checking account.
ANSWER:
Deposit Slip

25. CHAPTER NINE QUESTION:
A personal record of all your deposits and withdrawals should be kept in your:
ANSWER:
Checkbook Register

26. CHAPTER NINE Reconciling your account (or balancing your account)
QUESTION:
Process of comparing your bank statement to your checkbook register to insure that the numbers match.
ANSWER:
Reconciling your account (or balancing your account)

27. CHAPTER NINE QUESTION:
What are examples of logical reasons your checkbook balance doesn’t match your bank statement balance?
ANSWER:
Outstanding checks (you wrote them but they haven’t been cashed yet)
Outstanding deposits (you deposited them after the bank statement was mailed)
ATM withdrawals or service fees that you forget to record in your checkbook register

28. CHAPTER NINE ANSWER: QUESTION:
You cannot cash a check unless it has been ______________________.
ANSWER:
Endorsed

29. CHAPTER NINE ANSWER: QUESTION: What type of endorsement is this?
Blank Endorsement

30. CHAPTER NINE ANSWER: QUESTION: What type of endorsement is this?
Restrictive Endorsement

31. CHAPTER NINE QUESTION: Debit Card ANSWER:
Special ATM Card that allows you to pay for transactions right out of your checking account by simply swiping the card
ANSWER:
Debit Card

32. STUDY, STUDY, STUDY
Ok…. These were the easy ones! You have two chapters of notes to review!
Don’t forget to study!