Chapter One Flashcards
(18 cards)
Balance Sheet
A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.
Fixed expenses
Like rent (pay the same amount every so often)
Net Loss
Result that occurs when expenses exceed the income or total revenue produced for a given period of time
Basic Wealth Protection
The sum of assets belonging to one person including money, property, personal possessions
Income
The money you make or receive on a regular basis
Spending Plan
Pretty much a budget
Expense
Something that you have to pay
Income and Expense statement
Financial statement that reports a company’s financial performance over a specific accounting period
Want
Something you don’t really need
Flexible expenses
Costs that are easily changed
Lifestyle conditions
Marital status, employment status, income, age, number of dependents, economic outlook, education, health status,
Financial planning
Comprehensive evaluation of an investors current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans
Wealth
An abundance of valuable possessions or money
Financial Statement
A formal report of financial activities and position of business, persons or other entities
Net gain
The overall improvement observed in some measure after all positive and negative influences have been accounted for
Wealth Accumulation
Determined by taking the total market value of all physical assets owned, then subtracting all debt (giving to yourself)
Wealth Distribution
Giving to others
Steps to the spending plan process
1) set financial goals
2) organize
3) decide
4) implement
5) control
6) evaluate
