Personal Financial Literacy: Sources of Income

Select each source of income.

- a check from your roommate for rent - the tip your client left you - a gift check from your aunt - interest deposited into your checking account

Commission

A fee paid to an employee for their sale or services, which fee is usually based on a percentage of the sale price.

Wages from an employer are the only source of income.

False

Dividends

Money paid to people who own stock in a company from the company's earnings.

Interest

Money the bank gives you when you keep your money in one of their accounts.

Capital Gains

The income earned by the sale of assets, such as stocks or property, which income is the difference between the price paid and the selling price.

Income

The money received for work or products sold from other sources, such as rent or investments.

Taxable Income

The portion of income that is subject to being taxed.

When a company makes earnings or a profit, and they share this profit with the stockholders, it's called _____.

dividends

Tips are considered _____.

taxable income

Rick works off commission. He earns 10 percent of all manufacturing equipment he sells. If he made a sale of $9,000, how much was his commission?

$900

Stockholder

An individual who owns one or more shares of stock in a joint stock company.

Susan bought some land. She sold it for $3,000 more than she paid for it. The $3,000 is an example of _____.

capital gains