WEEK 3-4 Flashcards
item or commodity that is generally accepted as a means of payment for goods and services.
Money
as means of Repayment of debt. serves as an asset to its holder
Money
Oldest Form of Payment (10,000 to 3000 BCE) executed based on perceived equal value. IOU concept.
Barter System
6 CHARACTERISTICS OF MONEY.
must have value.
must be durable.
must be portable.
must be uniform.
must be limited.
must be divisible.
must not be perishable for people to store it for the future.
STORE OF VALUE
a guarantee of acceptance to pay for transactions.
ITEM OF WORTH (intrinsic value)
freely and widely used for exchange of goods and services. must only be issued and recognized by one authorized government body.
MEANS OF EXCHANGE
to record wealth possessed, trade, or spent.
UNIT OF ACCOUNT
to record wealth possessed, trade, or spent.
UNIT OF ACCOUNT
must be widely accepted to value a debt.
STANDARD OF DEFERRED PAYMENT
5 PURPOSES OF BUDGETING
- Helps You work with long term goals.
- Can keep you from overspending.
- can make retirement saving easier.
- helps you prepare for emergencies.
- can reveal spending habits
5 PURPOSES OF BUDGETING
- Helps You work with long term goals.
- Can keep you from overspending.
- can make retirement saving easier.
- helps you prepare for emergencies.
- can reveal spending habits
4 BUDGETING SYSTEMS
- zero-based budgeting.
- envelope budgeting system.
- Pay yourself first.
- 60/30/20 rule
the ability to borrow money under the agreement that you’ll repay the debt later. the ability to borrow money under the agreement that you’ll repay the debt later. can also refer to an individual’s history of borrowing and repaying debt.
CREDIT
A method of budgeting in which all expenses must be justified for each new period.
zero-based budgeting
