Personal Finance EOC reveiw Flashcards Preview

English vocab. > Personal Finance EOC reveiw > Flashcards

Flashcards in Personal Finance EOC reveiw Deck (61):
1

Standard of Living

the degree of wealth and material comfort available to a person or community.

2

Potential Earning Power

The amount of money that is anticipated to be received over a period of time, either as payment for work, goods, or services, or as profit on capital

3

Service Industries

a business that does work for a customer, and occasionally provides goods, but is not involved in manufacturing.

4

Cafeteria-style benefits

plan that allows staff to choose from a variety of benefits plan that best suits their needs.

5

Social Security

the nation's retirement program

6

Pension Plan

a method where employee transfers part of his or her current income stream toward retirement income

7

Inflation

a general increase in prices and fall in the purchasing value of money.

8

Tax Liability

the total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event.

9

Income tax

tax levied by a government directly on income, especially an annual tax on personal income.

10

Deduction

the amount of money subtracted from the gross pay earned for mandatory systematic taxes, employee sponsored medical benefits, and or retirement benefits

11

Exemption

a deduction allowed by law to reduce the amount of income that would otherwise be taxed.

12

Tax audit

an accounting procedure where the IRS examines your individual or business financial records to ensure you filed your tax return accurately.

13

Networking

interact with other people to exchange information and develop contacts

14

Commercial Banks

largest full service institutions operated under state and federal laws

15

Overdraft Protection

a line of credit that banks offer to their customers to cover their overdrafts.

16

Liquidity

the availability of liquid assets to a market or company.

17

Interest

money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

18

Assets

a useful or valuable thing, person, or quality.

19

Liabilities

the state of being responsible for something, especially by law.

20

Budget

an estimate of income and expenditure for a set period of time.

21

Credit Union

a nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates.

22

Commercial Bank

non-profit cooperative institution owned by their members

23

Bank reconciliation

a process that explains the difference between the bank balance shown in an organization's bank statement, as supplied by the bank, and the corresponding amount shown in the organization's own [accounting] records at a particular point in time.

24

Market value

the amount for which something can be sold on a given market.

25

Direct Deposit

paycheck money goes straight into designated account

26

Deductible

the amount you have to pay out-of-pocket for expenses before the insurance company will cover the remaining costs.

27

Health insurance

A type of insurance coverage that pays for medical and surgical expenses that are incurred by the insured.

28

Co-payment

a payment made by a beneficiary (especially for health services) in addition to that made by an insurer.

29

Co-insurance

a type of insurance in which the insured pays a share of the payment made against a claim.

30

Medicare

the is the nation's health care policy for elderly and disabled

31

Beneficiary

a person who derives advantage from something, especially a trust, will, or life insurance policy.

32

Term insurance

a type of life insurance policy that provides coverage for a certain period of time, or a specified "term" of years.

33

Disability income insurance

a program managed by the Social Security Administration that insures a worker in case of a mishap.

34

Renters insurance

a form of property insurance that provides coverage for a policyholder's belongings and liability within a rental property.

35

Annual percentage rate

the annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan.

36

Opportunity Cost

what we give up to get something else

37

Down Payment

an initial payment made when something is bought on credit.

38

Consumer credit

A debt that someone incurs for the purpose of purchasing a good or service.

39

Creditor

a person or company to whom money is owed.

40

Financing

provide funding for

41

Finance charges

any fee representing the cost of credit, or the cost of borrowing.

42

Net income

is an entity's income minus cost of goods sold, expenses and taxes for an accounting period.

43

Collateral

something pledged as security for repayment of a loan, to be forfeited in the event of a default.

44

Credit rating

an estimate of the ability of a person or organization to fulfill their financial commitments, based on previous dealings.

45

Bankruptcy

the state of being completely lacking in a particular quality or value.

46

Emergency fund

An account that is used to set aside funds to be used in an emergency, such as the loss of a job, an illness or a major expense.

47

Certificate of Deposit

insured interest restricted access (CD); interest rate changes depending on time length of seven days to eight years; early withdrawls equals PENTALTY

48

Money market account

government insured account; usual minimum deposit of $1,000; account with high interest rate of return

49

Rate of return

The gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost.

50

Compounding

make up (a composite whole)

51

Rule of 72

a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return

52

Vesting

the conveying to an employee of unconditional entitlement to a share in a pension fund.

53

Individual retirement plan

An individual retirement account (IRA) that allows individuals to direct pretax income, up to specified annual limits, toward investments that can grow tax-deferred

54

Annuity

a fixed sum of money paid to someone each year

55

Portfolio

a range of investments held by a person or organization

56

Maturity Date

the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

57

Yield

the full amount of an industrial product.

58

Mutual fund

an investment program funded by shareholders that trades in diversified holdings and is professionally managed.

59

Direct investment

The purchase or acquisition of a controlling interest in a foreign business by means other than the outright purchase of shares.

60

Dividends

a sum of money paid by a company to its shareholders out of its profits (or reserves).

61

Diversification

a risk management technique that mixes investments within a portfolio.