Chapter 8

Question 1

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

Answer 1

budget

Question 2

list the 4 steps to prepare a budget

Answer 2

1) estimate income
2) decide how much to save
3) estimate expenses
4) balance your budget

Question 3

list 3 things that lead to financial security

Answer 3

1) planning
2) budgeting
3) keeping good records

Question 4

expenses/costs that do not change from month to month, they remain constant, cannot be easily changed or removed from a budget

Answer 4

fixed expenses

Question 5

expenses that may change according to needs and short-term goals

Answer 5

variable expenses

Question 6

examples of fixed expenses

Answer 6

utilities, loan payments (car, mortgage), cell phone

Question 7

examples of variable expenses

Answer 7

gas, entertainment, food

Question 8

a legally enforceable agreement between two or more people

Answer 8

contract

Question 9

list some common legal agreements…

Answer 9

1) credit accounts
2) mortgage loans
3) rental agreements

Question 10

unwritten agreements, often called ______ ______, are created by the actions or conduct of someone

Answer 10

implied contract

Question 11

anything of value exchanged as part of a contract

Answer 11

consideration

Question 12

when one person makes an offer and another person changes is, the second person is making a _______

Answer 12

counteroffer

Question 13

has legal agreement when a valid offer is made and accepted

Answer 13

contract

Question 14

list the elements of an enforceable contract…

Answer 14

1) agreement
2) consideration
3) contractual capacity
4) legality
5) genuine assent
6) legal form

Question 15

the person who creates and signs a promissory note

Answer 15

the maker

Question 16

when a document is ______, the signature is verified by a notary public (something is signed in public where people can see)

Answer 16

notarized

Question 17

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

Answer 17

competent negotiable parties

Question 18

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

Answer 18

instrument

Question 19

when income exceeds expenses, the difference is called _____ _____

Answer 19

cash surplus

Question 20

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)

Answer 20

net worth

Question 21

amounts of money owed to others, also known as debts

Answer 21

liabilities

Question 22

items of value that a person owns

Answer 22

assets

Question 23

a person who promises to pay the debt of another person

Answer 23

co-signer

Question 24

a statement about a product’s quality or performance that the seller assures the buyer are true (also called a guarantee)

Answer 24

warranty

Question 25

a computer program that organizes data for easy search and retrieval

Answer 25

database

Question 26

all money you own is either…..

Answer 26

saved, spent, or invested

Question 27

money you have to spend as you wish–after all required taxes and deductions

Answer 27

disposable income

Question 28

an orderly program for spending, saving, and investing the money you receive

Answer 28

financial plan

Question 29

the person to whom a negotiable instrument is made payable

Answer 29

payee

Question 30

the word ____ means legally collectible

Answer 30

negotiable

Question 31

program that organizes data in columns and rows and performs calculations using the data

Answer 31

spreadsheet

Question 32

ability to understand and enter into a contract ex. have to be 18 yrs. old

Answer 32

contractual capacity

Question 33

used for insurance claim, warranty

Answer 33

personal property records

Question 34

warranties written in writing

Answer 34

written warranties

Question 35

non-written warranties

Answer 35

implied warranties

Question 36

anything less than a full warranty, & nothing to do with time

Answer 36

limited warranty

Question 37

ex. monthly cell phone bill, when you pay for each piece of paper to be printed

Answer 37

service contract

Question 38

list three things of a good filing system…

Answer 38

1) folders
2) labels
3) file cabinets

Question 39

list the advantages of electronic record keeping (computerized systems):

Answer 39

1–ease of updating information
2—ease of record storage and retrieval
3–speed of making new computations and comparisons