Personal Finance Chapter 3 Vocabulary

Question 1

Financial documents you create to get a picture of your financial situation.

Answer 1

Personal Financial Statements

Question 2

The difference between your assets and liabilities.

Answer 2

Net Worth

Question 3

Assets that can be quickly converted into cash, without loss of value.

Answer 3

Liquid Assets

Question 4

Debt that you owe to others

Answer 4

Liabilities

Question 5

The money that is left over after all essentials have been paid for.

Answer 5

Discretionary Income

Question 6

A situation that occurs when a person spends less money than they receive.

Answer 6

Surplus

Question 7

A situation that occurs when a person spends more money than they receive.

Answer 7

Deficit

Question 8

A document you create after the money to determine how you spent your money and compare it to your budget.

Answer 8

Cash-Flow Statement

Question 9

A document that you create that compares your assets and liabilities.

Answer 9

Personal Balance Sheet

Question 10

A plan for how you will spend your money.

Answer 10

Budget