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Personal Finance > Chapter 8 > Flashcards

Chapter 8 Flashcards

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1
Q

Its an orderly program for spending saving and investing the money you earn -

A

Financial plan

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2
Q

Planning, budgeting, and keeping good records provide the road map that leads to …..

A

Financial security

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3
Q

Is a spending and saving plan based on your expected income and expenses

A

Budget

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4
Q

The budget must …..

A

Balance

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5
Q

It helps you plan your spending and saving so that you wont have to borrow money or use credit to meet your daily needs

A

Budget

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6
Q

Steps to prepare a budget -

A
  1. Estimate income
  2. Decide how much to save
  3. Estimate expenses
  4. Balance your budget
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7
Q

They are costs that do not change from month to month

A

Fixed expenses

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8
Q

Are costs that vary in amount and type, depending on the choices you make

A

Variable expenses

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9
Q

What are the four personal records

A
  1. Statement of net worth
  2. Tax records
  3. Income and expense
  4. Personal property records
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10
Q

Tax records -

A

Keep for 7 years

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11
Q

Income and expense -

A

W2 forms etc.

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12
Q

Personal property records -

A

Deed to your land, house, bills

& you keep these in case you have to file a claim

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13
Q

Is a legally enforceable agreement between two or more ppl

A

Contract

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14
Q

3 common legal agreements-

A

Credit accounts
Mortgage loans
Rental agreements

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15
Q

2 types of expressing contracts -

A

Oral

Written

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16
Q

They are contracts that you dont have to say anything about it

A

Implied contracts

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17
Q

6 elements of an enforcable contract -

A 
Agreement
Consideration
Contractual capacity
Legality 
Genuine assent
Legal form
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18
Q

Its the money exchanged -

A

Consideration

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19
Q

Contractual capacity -

A

18

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20
Q

Legality -

A

Has to be legal

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21
Q

Genuine assent -

A

Cant be forced into it

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22
Q

Legal form-

A

Documents have to be in writing

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23
Q

A contract has legal agreement when a ……

A

Valid offer is made and accepted

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24
Q

When one person makes an offer and another person changes it, the second person is making a …….

A

Counteroffer

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25
Q

To be legally enforcable, a contract must have a ……

A

Lawful purpose

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26
Q

Every state has a statute of frauds to prevent harm due to ……

A

Fraudulent conduct

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27
Q

This law requires that some contracts be in writing and signed to be legally binding ….

A

Statute of frauds

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28
Q

Is an unconditional written promise to pay a specificed sum of money upon demand of the holder

A

Negotiable instrument

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29
Q

Common negotiable instruments -

A

Checks

Promissory notes

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30
Q

Its also called a guarantee -

A

Warranty

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31
Q

What are the four warranties

A

Implied
Written
Limited
Service

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32
Q

Implied that the product will do what its supposed to do -

A

Implied warranty

33
Q

Some things have to be in writing for certain products -

A

Written warranties

34
Q

All warranties are mostly this one ….

Anything less than a full

A

Limited warranties

35
Q

To get a warranty extended & only pay the workers

A

Service contract

36
Q

3 paper filing system -

A

Folders
Labels
File cabinet

37
Q

Advantages of computerized systems -

A

Ease of updating info
Ease of record storage & retrieval
Speed of making new computations & comparisions

38
Q

An orderly program for spending, saving, and investing the money you receive is known as -

A

Financial plan

39
Q

Money you have to spend as you wish - after all required taxes and deductions - is known as …

A

Disposable income

40
Q

A …. is an organized plan whereby you match your expected income with expenses and savings

A

Budget

41
Q

A computer program that organizes data for easy search and retrieval is an ….

A

Database

42
Q

A …. is a statement about a product’s qualities or performances that the seller assures the buyer are true

A

Warranty

43
Q

Expenses that remain constant and cannot be easily changed or removed from a budget are called ….

A

Fixed expenses

44
Q

Expenses that may change according to needs and short - term goals are called …….

A

Variable expenses

45
Q

Is a person who promises to pay the debt of another person

A

Co-signer

46
Q

Items of value that a person owns are called

A

Assets

47
Q

Amounts of money owed to others, also known as debts, are called ….

A

Liabilities

48
Q

When you subtract your debts from the total amount of things you own, the difference is known as ..

A

Net worth

49
Q

When income exceeds expenses, the difference is called

A

Cash surplus

50
Q

A legally enforcable agreement between 2 or more parties to do or not to do something is a

A

Contract

51
Q

Unwritten agreements, often called ………., are created by the actions or conduct of someone

A

Implied contracts

52
Q

Anything of value exchanged as part of a contract is called

A

Consideration

53
Q

…. are persons who are legally able to give sane and intelligent consent and are legally capable of entering into contracts

A

Competent

54
Q

…. is a document that is a written order to release or issue money, the most common of which is a check

A

Negotiable instrument

55
Q

When a document is ……, the signature is verified by a notary public

A

Notarized

56
Q

The person who creates and signs a promissory note is called the …

A

The maker

57
Q

The person to whom a negotiable instrument is made payable is called the …

A

Payee

58
Q

The word …… means legally collectible

A

Negotiable

59
Q

A ….. program organizes data in columns and rows and performs calculations using the data

A

Spread sheet

60
Q

T or F

A major reason for financial planning is to prevent careless spending

A

T

61
Q

T or F

To prepare your personal budget, you should first list sources of money you expect to receive, known as income

A

T

62
Q

T or F

Recipeints and documents showing income and expenses should be kept in a safe place because they are proof or evidence to use in the event of an audit

A

T

63
Q

T or F

Minors are not considered competent parties to enter into an agreement

A

True

64
Q

T or F

A promissory note is an example of a negotiable instrument -

A

True

65
Q

T or F

Original documents, such as insurance policies and wills, should be kept in a safe deposit box

A

True

66
Q

T or F

An advantage or an electronic filing system is the ease of updating information

A

True

67
Q

T or F

Fixed expenses remain the same from month to month

A

True

68
Q

Most financial experts agree that families should set aside at least …… prescient of their disposable income each pay period -

A

10

69
Q

A house payment and utilities are examples of ……

A

Fixed expenses

70
Q

Lunches, medical bills, personal care items, & clothing are all …..

A

Variable expenses

71
Q

A common purpose for the net worth statement is …

A

Loan

72
Q

A personal property inventory is most commonly used for …..

A

Proof of loss from fire, theft, or property damage

73
Q

The IRS can audit your tax returns for a period of …

A

3 years

74
Q

When a person changes the terms of an offer, she or he has made an …

A

Counteroffer

75
Q

Which are three things that are required for a legally binding agreeement

A

Agreement
Consideration
Capacity

76
Q

When your assists are greater than your liabilities, you are said to be …

A

Solvent

77
Q

An agreement entered into orally is …

A

Enforceable

78
Q

Intentional misreprentation of a material fact is called …

A

Fraud

Personal Finance (8 decks)

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