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AR Unit 1-3
Arkansas Intro to Finance EOC review
| Question | Answer |
|---|---|
| Adjusted gross income | the result of adjustments subtracted from gross income |
| Assets | items of value that a person owns |
| Benefits | company-provided supplements to salaries, such as sick pay, vacation time, and health insurance |
| Budget | a spending and saving plan based on your expected income and expenses |
| Canceled check | a check that bears the bank's stamp, indicating it has cleared |
| Check | a written order to a bank to pay the stated amount to the person or business (payee) named on it |
| Checkbook register | a booklet used to record checking account transactions |
| Deductions | amounts subtracted from gross pay |
| Disposable income | the money left to spend or save after taxes have been paid |
| Endorsement | a written amendment to an insurance policy |
| Exemption | an amount you may subtract from your income for each person who depends on your income to live |
| Financial plan | a set of goals for spending, saving, and investing the money you earn |
| Fixed expenses | costs you are obligated to pay at specific times, regardless of other events |
| Gross income | all taxable income received, including wages, tips, salaries, interest, dividends, unemployment |
| Gross pay | the total amount you earn before any deductions are subtracted |
| Incentive pay | money offered to encourage employees to strive for higher levels of performance |
| Liabilities | amounts of money owed to others |
| Net pay | the amount left after all deductions have been taken out of your gross pay |
| Overdraft | a check written for more money than your account contains |
| Overtime | the time worked beyond the regular hours; usually more than 40 hours in a five-day period |
| Reconciliation | the process of matching your checkbook register with the bank statement |
| Revenue | money collected by the government from residents and businesses in the form of taxes |
| Standard deduction | a stated amount that you may subtract from adjusted gross income instead of itemizing your deductions |
| Taxable income | the income on which you pay tax |
| Tax brackets | income ranges to which tax rates apply |
| Tax credit | an amount subtracted directly from the tax owed |
| Tax evasion | willful failure to pay taxes |
| Variable expense | costs that vary in amount and type, depending on events and the choices you make |
| Annual percentage rate (APR) | the cost of credit expressed as a yearly percentage |
| Bankruptcy | a legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay |
| Capacity | the ability to repay a loan with present income |
| Capital | property possessed that is worth more than debts owed |
| Character | a responsible attitude toward living up to agreements |
| Closed-ended credit | a loan for a specific amount that must be repaid in full, including all finance charges, by a stated due date |
| Collateral | property pledged to a creditor to assure repayment of a loan |
| Comparison shopping | a shopping method that enables consumers to determine whether they are getting the best quality for the price |
| Consumer advocate | a person who actively promotes consumer causes |
| Co-signer | a person who promises in writing to repay a promissory note if the maker fails to pay |
| Credit | money borrowed to buy something now with an agreement to pay for it later |
| Credit bureau | a company that gathers, stores, and sells credit information to business subscribers |
| Credit history | the complete record of your borrowing and repayment performance |
| Credit rating | a measure of credit-worthiness based on an analysis of a consumer's financial history |
| Credit report | a written statement of a consumer's credit history issued by a credit bureau to its business subscribers |
| Debtor | a person who owes money to others |
| Discharged debts | debts erased by the court during bankruptcy proceedings |
| Discrimination | treating people differently based on prejudice rather than individual merit |
| Down payment | a part of the purchase price paid in cash up front, reducing the amount of a loan |
| Finance charge | the total dollar amount of all interest and fees you pay for the use of credit |
| Finance companies | small loan companies that usually charge high interest rates |
| Fixed-rate loans | loans for which the interest rate does not change (up or down) over the life of the loan |
| Fraud | the intentional misrepresentation of information with the intent to deceive or mislead |
| Garnishment | a legal process that allows part of your paycheck to be withheld for payment of a debt |
| Interest rate | the percentage charged for the use of money |
| Line of credit | a pre-established amount that can be borrowed on demand with no collateral |
| Needs | ingredients necessary for maintaining physical life |
| Open-ended credit | an agreement to lend the borrower an amount up to a stated limit and to allow borrowing up to that limit again whenever the balance falls below the limit |
| Opportunity cost | the value of your next best alternative whenever you make a choice |
| Prime rate | the interest rate lenders offer to their best business customers |
| Principal | the amount borrowed, or the unpaid portion of the amount borrowed, on which the borrower pays interest |
| Service credit | an agreement to have a service performed now and pay for it later |
| Simple interest | interest computed on the amount borrowed only without compounding |
| Statement | an itemized bill showing charges, credit, and payments posted to your account during the billing period |
| Time | the length of time the borrower will take to repay a loan; expressed as a fraction of a year |
| 20/10 rule | your total borrowing should not exceed 20 percent of your yearly take-home pay, and you should not take on monthly payments that total more than 10 percent of your monthly take-home pay |
| Unsecured debt | a loan that is not backed by pledged assets |
| Unused credit | the remaining credit available to you; calculated as your credit limit minus the amount you have already spent |
| Values | the ideals in life that are important to you and affect your decision making |
| Adjustable-rate mortgage (ARM) | a mortgage for which the interest rate changes in response to the movement of interest rates in the economyas a whole |
| Annuity | a contract sold by an insurance company that provides an investor with a series of regular payments, usually after retirement |
| Bonds | debt obligations of corporations or state or local governments |
| Capital gain | an increase in the value of stock above the price initially paid for it |
| Collision coverage | automobile insurance that protects your own car against damage from accidents or vehicle overturning |
| Deed | a document that transfers title of real property from one party to another |
| Depreciation | in real estate, the decline in value of property due to normal wear and tear |
| Disability insurance | an insurance plan that makes regular payments to replace income lost when illness or injury prevents the insured from working |
| Dividends | the part of the corporation's profits paid to stockholders |
| Equity | the difference between the market value of property and the amount owed on it |
| Estate | all that a person owns, less debts owed, at the time of the person's death |
| Estate planning | preparing a plan for transferring property during one's lifetime and at one's death |
| Fixed-rate mortgage | a mortgage on which the interest rate does not change during the term of the loan |
| Futures | contracts to buy and sell commodities or stocks for a specified price on a specified date in the future |
| Homeowner's policy | insurance that protects property owners from property and liability risks |
| Individual retirement account (IRA) | a retirement savings plan that allows individuals to set aside money in tax-deferred savings up to a limit set by the government |
| Inflation | a rise in the general level of prices |
| Insurance | a method of spreading individual risk among a large group of people to make losses more affordable for all |
| Insurer | a business that agrees to pay the cost of potential future losses in exchange for regular fee payments |
| Interest | money paid for the use of money; earnings on a savings account |
| Investing | the use of savings to earn a financial return |
| Landlord | the owner of rental property |
| Lease | a written agreement that allows a tenant to use property for a specified time period and rent |
| Liability coverage | insurance to protect against claims for bodily injury to another person or damage to another person' s property |
| Lien | a financial claim on property |
| Life insurance | insurance that provides funds to the beneficiaries when the insured dies |
| Market value | the price for which a stock is bought and sold in the marketplace |
| Money market account | a combination savings-investment plan in which money deposited is used to purchase safe, liquid securities |
| Mortgage | a loan to purchase real estate |
| Mutual fund | a large, professionally managed group of investments |
| Personal risk | chances of loss involving income and standard of living |
| Policy | a written insurance contract |
| Policyholder | the person who owns an insurance policy |
| Power of attorney | a legal document authorizing someone to act on your behalf |
| Principal | the amount of money deposited by a saver |
| Property risk | the chances of loss or harm to personal or real property |
| Real estate | land and any buildings on it |
| Renter's policy | insurance that protects renters from property and liability risks |
| Risk management | an organized strategy for controlling financial loss from pure risks |
| Securities | stocks and bonds issued by corporations or the government |
| Security deposit | a refundable amount paid in advance to protect the owner against damage or nonpayment |
| Stockbroker | an employee of a brokerage firm who buys and sells securities for investors |
| Stockholders | shareholders; owners of a corporation |
| Tenant | the person who rents property from a landlord |
| Title | a legal document that establishes ownership |
| Vehicle Identification Number (VIN) | a unique number that identifies an automobile |
Created by:
karenhaley
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