Unit Billing

Variable expenses

Expenses that can change from month to month, such as utility bills.

Gross pay

The total amount of money earned before deductions, often referred to as take-home pay, but this statement is false.

Recommended savings percentage

Most financial advice suggests saving at least 10% of your disposable income.

Cell phone contracts and student loan agreements

These documents are not important to keep for income tax purposes, making this statement false.

Fixed expenses recommendation

Most financial experts recommend that fixed expenses should not exceed 50-60% of take-home pay.

Net pay calculation

The statement that net pay can be calculated by multiplying hours worked by hourly wage is false.

FICA

The payroll deduction for the social security tax.

Liabilities

Things you owe, not own; thus, this statement is false.

Common employer benefit

The most common benefit provided by employers is health insurance.

Budget time period

A budget is not commonly set for one week; this statement is false.

Commission

Money earned from completing a task, such as selling a home or car.

Budget surplus vs. deficit

A budget surplus is generally better than a deficit, but this statement is false under certain financial conditions.

Budget surplus definition

If your income exceeds your expenses, you are said to have a budget surplus.

Types of expenses

Two types of expenses to account for are fixed and variable expenses.

Budget inclusion

Income from a part-time job would not typically be included in a budget.

Budget based on gross pay

Your budget should not be set based on gross pay, making this statement false.

Net worth statement

A net worth statement is most commonly used to prepare for a budget.

Disposable income definition

Disposable income is not defined as careless or wasteful spending, making this statement false.

Consumer records retention

Consumers generally keep all receipts except for medical receipts from the past ten years.

Agreement copies responsibility

It is your responsibility to keep copies of agreements you sign for future reference.

Examples of fixed expenses

Car payments, mortgage payments, and student loan payments are examples of fixed expenses.

Overtime pay rate

Employers must pay workers 1.5 times their regular hourly wage for hours worked over 40.

Least important budget reason

Preparing an income tax return is considered the least important reason to create a budget.

Solvency definition

You are solvent when your assets are greater than your liabilities.

Liquid asset definition

A liquid asset is something that can be rapidly converted to cash without significant loss.