Webinar: Financial Management Flashcards
Define
Credit Union
Nonprofit financial institution
Define
FDIC
- Federal Deposit Insurance Corporation
- -Insures accounts at for-profit financial institutions
How much does the FDIC/NCUA insure?
Up to $250k per person, per account type, per institution
Define
NCUA
National Credit Union Administration
Insures accounts at credit unions
True or False?
All bank accounts are FDIC insured?
FALSE
What percentage of income should be put in savings?
20%
What are the four main savings goals?
- Emergency
- Revolving
- Major Purchase
- Retirement
Define
Net Worth
Assets after liabilities are subtracted out, at a specific point in time
Define
Insolvent
Negative net worth
Define
Cash Flow Statement
Income and expenses, over a set period of time
Net worth formula
Assets - Liabilities = Net Worth
Define
Liquidity Ratio
Number of months of expenses that can be paid with liquid assets
What is the ideal liquidity ratio?
3.0 (3 months)
Define
Debt-to-Income Ratio
Debt payments divided by gross income
What is the ideal debt-to-income ratio?
36% or less
Define
Implied Warranty
Regulated by federal law, states a product essentially must work as it is advertised. Invalid if sold “as is”
Define
Express Warranty
Stated warranty. Warranty itself outlines the coverage
Define
Extended Warranty
- Also known as a service warranty
- Sold separatly
- Common with durable goods
- Can be purchased with used goods
- Can have strict limits on coverage
What is the FTC?
- The Federal Trade Commission is tasked with consumer protection and antitrust regulation.
- Primary agency for identity theft
Which government agency is the primary for identity theft?
Federal Trade Commission
(FTC)
What is the CFPB?
- The Consumer Finance Protection Bureau educates about and enforces federal consumer protection laws.
- Primary for matters related to financial services
Which government agency is the primary matters related to financial services?
Consumer Finance Protection Bureau
(CFPB)
Define
Progressive Taxes
Tax rate increases with taxabale amount
Define
Regressive Taxes
Tax rates are unconnected to income and thus are proportionally higher for lower incomes (ex: sales and property taxes)
Define
Marginal Tax Rate
The highest tax rate for an individual’s income
(aka “last dollar” rate)
What is a W-2?
- Provided by employer
- Documents income and deductions
- Used to file taxes
What is a W-4?
Provided to employer by employee to state withholdings
What is the difference between a W-2 and a W-4?
A W-4 is provided by the employee to an employer to state their tax withholdings. At the end of the year, the employer provides the employee with a W-2, which documents the employee’s income and deductions and is used by the employee to file their taxes.
What is an I-9?
Used to verify employment eligibility
What is a W-9?
Required from independent contractors
What are 1099s?
Refers to a range of different forms used to document non-wage income. Usually used by self-employed and contracted employees
What is a 1040?
Refers to a range of different froms used by employees to file tax returns.
Define:
Gross Pay
Pay before taxes and deductions
Define
Net Pay
Pay after taxes and deductions
