Chapter 8 Flashcards by madison Bronder

Its an orderly program for spending saving and investing the money you earn -

Financial plan

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Planning, budgeting, and keeping good records provide the road map that leads to …..

Financial security

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

Budget

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The budget must …..

Balance

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It helps you plan your spending and saving so that you wont have to borrow money or use credit to meet your daily needs

Budget

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Steps to prepare a budget -

Estimate income
Decide how much to save
Estimate expenses
Balance your budget

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They are costs that do not change from month to month

Fixed expenses

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Are costs that vary in amount and type, depending on the choices you make

Variable expenses

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What are the four personal records

Statement of net worth
Tax records
Income and expense
Personal property records

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Tax records -

Keep for 7 years

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Income and expense -

W2 forms etc.

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Personal property records -

Deed to your land, house, bills

& you keep these in case you have to file a claim

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Is a legally enforceable agreement between two or more ppl

Contract

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3 common legal agreements-

Credit accounts
Mortgage loans
Rental agreements

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2 types of expressing contracts -

Oral

Written

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They are contracts that you dont have to say anything about it

Implied contracts

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6 elements of an enforcable contract -

Agreement
Consideration
Contractual capacity
Legality 
Genuine assent
Legal form

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Its the money exchanged -

Consideration

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Contractual capacity -

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Legality -

Has to be legal

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Genuine assent -

Cant be forced into it

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Legal form-

Documents have to be in writing

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A contract has legal agreement when a ……

Valid offer is made and accepted

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When one person makes an offer and another person changes it, the second person is making a …….

Counteroffer

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To be legally enforcable, a contract must have a ......

Lawful purpose

Every state has a statute of frauds to prevent harm due to ......

Fraudulent conduct

This law requires that some contracts be in writing and signed to be legally binding ....

Statute of frauds

Is an unconditional written promise to pay a specificed sum of money upon demand of the holder

Negotiable instrument

Common negotiable instruments -

Checks | Promissory notes

Its also called a guarantee -

Warranty

What are the four warranties

Implied Written Limited Service

Implied that the product will do what its supposed to do -

Implied warranty

Some things have to be in writing for certain products -

Written warranties

All warranties are mostly this one .... Anything less than a full

Limited warranties

To get a warranty extended & only pay the workers

Service contract

3 paper filing system -

Folders Labels File cabinet

Advantages of computerized systems -

Ease of updating info Ease of record storage & retrieval Speed of making new computations & comparisions

An orderly program for spending, saving, and investing the money you receive is known as -

Financial plan

Money you have to spend as you wish - after all required taxes and deductions - is known as ...

Disposable income

A .... is an organized plan whereby you match your expected income with expenses and savings

Budget

A computer program that organizes data for easy search and retrieval is an ....

Database

A .... is a statement about a product's qualities or performances that the seller assures the buyer are true

Warranty

Expenses that remain constant and cannot be easily changed or removed from a budget are called ....

Fixed expenses

Expenses that may change according to needs and short - term goals are called .......

Variable expenses

Is a person who promises to pay the debt of another person

Co-signer

Items of value that a person owns are called

Assets

Amounts of money owed to others, also known as debts, are called ....

Liabilities

When you subtract your debts from the total amount of things you own, the difference is known as ..

Net worth

When income exceeds expenses, the difference is called

Cash surplus

A legally enforcable agreement between 2 or more parties to do or not to do something is a

Contract

Unwritten agreements, often called .........., are created by the actions or conduct of someone

Implied contracts

Anything of value exchanged as part of a contract is called

Consideration

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

Competent

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

Negotiable instrument

When a document is ......, the signature is verified by a notary public

Notarized

The person who creates and signs a promissory note is called the ...

The maker

The person to whom a negotiable instrument is made payable is called the ...

Payee

The word ...... means legally collectible

Negotiable

A ..... program organizes data in columns and rows and performs calculations using the data

Spread sheet

T or F | A major reason for financial planning is to prevent careless spending

T or F To prepare your personal budget, you should first list sources of money you expect to receive, known as income

T or F Recipeints and documents showing income and expenses should be kept in a safe place because they are proof or evidence to use in the event of an audit

T or F Minors are not considered competent parties to enter into an agreement

True

T or F A promissory note is an example of a negotiable instrument -

True

T or F Original documents, such as insurance policies and wills, should be kept in a safe deposit box

True

T or F An advantage or an electronic filing system is the ease of updating information

True

T or F Fixed expenses remain the same from month to month

True

Most financial experts agree that families should set aside at least ...... prescient of their disposable income each pay period -

A house payment and utilities are examples of ......

Fixed expenses

Lunches, medical bills, personal care items, & clothing are all .....

Variable expenses

A common purpose for the net worth statement is ...

Loan

A personal property inventory is most commonly used for .....

Proof of loss from fire, theft, or property damage

The IRS can audit your tax returns for a period of ...

3 years

When a person changes the terms of an offer, she or he has made an ...

Counteroffer

Which are three things that are required for a legally binding agreeement

Agreement Consideration Capacity

When your assists are greater than your liabilities, you are said to be ...

Solvent

An agreement entered into orally is ...

Enforceable

Intentional misreprentation of a material fact is called ...

Fraud