Chapter 8 Flashcards
a spending and saving plan based on your expected income and expenses
budget
list the 4 steps to prepare a budget
1) estimate income
2) decide how much to save
3) estimate expenses
4) balance your budget
list 3 things that lead to financial security
1) planning
2) budgeting
3) keeping good records
expenses/costs that do not change from month to month, they remain constant, cannot be easily changed or removed from a budget
fixed expenses
expenses that may change according to needs and short-term goals
variable expenses
examples of fixed expenses
utilities, loan payments (car, mortgage), cell phone
examples of variable expenses
gas, entertainment, food
a legally enforceable agreement between two or more people
contract
list some common legal agreements…
1) credit accounts
2) mortgage loans
3) rental agreements
unwritten agreements, often called ______ ______, are created by the actions or conduct of someone
implied contract
anything of value exchanged as part of a contract
consideration
when one person makes an offer and another person changes is, the second person is making a _______
counteroffer
has legal agreement when a valid offer is made and accepted
contract
list the elements of an enforceable contract…
1) agreement
2) consideration
3) contractual capacity
4) legality
5) genuine assent
6) legal form
the person who creates and signs a promissory note
the maker
when a document is ______, the signature is verified by a notary public (something is signed in public where people can see)
notarized
persons who are legally able to give sane and intelligent consent and are legally capable of entering into contracts
competent negotiable parties
a document that is a written order to release or issue money, the most common of which is a check
instrument
when income exceeds expenses, the difference is called _____ _____
cash surplus
when you subtract your debts from the total amount of things you own, the difference is known as _____ (what u own minus what you owe)
net worth
amounts of money owed to others, also known as debts
liabilities
items of value that a person owns
assets
a person who promises to pay the debt of another person
co-signer
a statement about a product’s quality or performance that the seller assures the buyer are true (also called a guarantee)
warranty
a computer program that organizes data for easy search and retrieval
database
all money you own is either…..
saved, spent, or invested
money you have to spend as you wish–after all required taxes and deductions
disposable income
an orderly program for spending, saving, and investing the money you receive
financial plan
the person to whom a negotiable instrument is made payable
payee
the word ____ means legally collectible
negotiable
program that organizes data in columns and rows and performs calculations using the data
spreadsheet
ability to understand and enter into a contract ex. have to be 18 yrs. old
contractual capacity
used for insurance claim, warranty
personal property records
warranties written in writing
written warranties
non-written warranties
implied warranties
anything less than a full warranty, & nothing to do with time
limited warranty
ex. monthly cell phone bill, when you pay for each piece of paper to be printed
service contract
list three things of a good filing system…
1) folders
2) labels
3) file cabinets
list the advantages of electronic record keeping (computerized systems):
1–ease of updating information
2—ease of record storage and retrieval
3–speed of making new computations and comparisons
