Chapter 8 Flashcards
Its an orderly program for spending saving and investing the money you earn -
Financial plan
Planning, budgeting, and keeping good records provide the road map that leads to …..
Financial security
Is a spending and saving plan based on your expected income and expenses
Budget
The budget must …..
Balance
It helps you plan your spending and saving so that you wont have to borrow money or use credit to meet your daily needs
Budget
Steps to prepare a budget -
- Estimate income
- Decide how much to save
- Estimate expenses
- Balance your budget
They are costs that do not change from month to month
Fixed expenses
Are costs that vary in amount and type, depending on the choices you make
Variable expenses
What are the four personal records
- Statement of net worth
- Tax records
- Income and expense
- Personal property records
Tax records -
Keep for 7 years
Income and expense -
W2 forms etc.
Personal property records -
Deed to your land, house, bills
& you keep these in case you have to file a claim
Is a legally enforceable agreement between two or more ppl
Contract
3 common legal agreements-
Credit accounts
Mortgage loans
Rental agreements
2 types of expressing contracts -
Oral
Written
They are contracts that you dont have to say anything about it
Implied contracts
6 elements of an enforcable contract -
Agreement Consideration Contractual capacity Legality Genuine assent Legal form
Its the money exchanged -
Consideration
Contractual capacity -
18
Legality -
Has to be legal
Genuine assent -
Cant be forced into it
Legal form-
Documents have to be in writing
A contract has legal agreement when a ……
Valid offer is made and accepted
When one person makes an offer and another person changes it, the second person is making a …….
Counteroffer
To be legally enforcable, a contract must have a ……
Lawful purpose
Every state has a statute of frauds to prevent harm due to ……
Fraudulent conduct
This law requires that some contracts be in writing and signed to be legally binding ….
Statute of frauds
Is an unconditional written promise to pay a specificed sum of money upon demand of the holder
Negotiable instrument
Common negotiable instruments -
Checks
Promissory notes
Its also called a guarantee -
Warranty
What are the four warranties
Implied
Written
Limited
Service
Implied that the product will do what its supposed to do -
Implied warranty
Some things have to be in writing for certain products -
Written warranties
All warranties are mostly this one ….
Anything less than a full
Limited warranties
To get a warranty extended & only pay the workers
Service contract
3 paper filing system -
Folders
Labels
File cabinet
Advantages of computerized systems -
Ease of updating info
Ease of record storage & retrieval
Speed of making new computations & comparisions
An orderly program for spending, saving, and investing the money you receive is known as -
Financial plan
Money you have to spend as you wish - after all required taxes and deductions - is known as …
Disposable income
A …. is an organized plan whereby you match your expected income with expenses and savings
Budget
A computer program that organizes data for easy search and retrieval is an ….
Database
A …. is a statement about a product’s qualities or performances that the seller assures the buyer are true
Warranty
Expenses that remain constant and cannot be easily changed or removed from a budget are called ….
Fixed expenses
Expenses that may change according to needs and short - term goals are called …….
Variable expenses
Is a person who promises to pay the debt of another person
Co-signer
Items of value that a person owns are called
Assets
Amounts of money owed to others, also known as debts, are called ….
Liabilities
When you subtract your debts from the total amount of things you own, the difference is known as ..
Net worth
When income exceeds expenses, the difference is called
Cash surplus
A legally enforcable agreement between 2 or more parties to do or not to do something is a
Contract
Unwritten agreements, often called ………., are created by the actions or conduct of someone
Implied contracts
Anything of value exchanged as part of a contract is called
Consideration
…. are persons who are legally able to give sane and intelligent consent and are legally capable of entering into contracts
Competent
…. is a document that is a written order to release or issue money, the most common of which is a check
Negotiable instrument
When a document is ……, the signature is verified by a notary public
Notarized
The person who creates and signs a promissory note is called the …
The maker
The person to whom a negotiable instrument is made payable is called the …
Payee
The word …… means legally collectible
Negotiable
A ….. program organizes data in columns and rows and performs calculations using the data
Spread sheet
T or F
A major reason for financial planning is to prevent careless spending
T
T or F
To prepare your personal budget, you should first list sources of money you expect to receive, known as income
T
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
T
T or F
Minors are not considered competent parties to enter into an agreement
True
T or F
A promissory note is an example of a negotiable instrument -
True
T or F
Original documents, such as insurance policies and wills, should be kept in a safe deposit box
True
T or F
An advantage or an electronic filing system is the ease of updating information
True
T or F
Fixed expenses remain the same from month to month
True
Most financial experts agree that families should set aside at least …… prescient of their disposable income each pay period -
10
A house payment and utilities are examples of ……
Fixed expenses
Lunches, medical bills, personal care items, & clothing are all …..
Variable expenses
A common purpose for the net worth statement is …
Loan
A personal property inventory is most commonly used for …..
Proof of loss from fire, theft, or property damage
The IRS can audit your tax returns for a period of …
3 years
When a person changes the terms of an offer, she or he has made an …
Counteroffer
Which are three things that are required for a legally binding agreeement
Agreement
Consideration
Capacity
When your assists are greater than your liabilities, you are said to be …
Solvent
An agreement entered into orally is …
Enforceable
Intentional misreprentation of a material fact is called …
Fraud
