Chapter 8: Budgets and Financial Records
True
A net worth statement will be useful when you apple for a loan or credit.
False
A payee is a person who promises to pay the debt of another person.
warranty
A ________ or guarantee is a statement assuring quality and performance of a product or service.
spreadsheet
A computer program that organizes data in columns and rows and can perform calculations using the data is called a....
True
A court will not require a person to perform an agreed-upon act if it is illegal.
False
A document that lists the valuable things you own, along with their purchase prices and approximate current values, is called an expense record.
contract
A legally enforceable agreement between two or more people is called an ______.
maker
A person who creates and signs the promissory note and agrees to pay it on a certain date is called the...
False
A set of goals for spending, saving, and investing the money you receive is called a budget.
budget
A spending and saving plan based on your expected income and expenses is called ______.
False
An express contract is legally binding, but and implied contract is not
net worth
Assets minus liabilities equals _______.
True
Before you prepare a budget, it is a good idea to keep track of your income and expenses for a month or two.
True
If a person signs a contract because he or she felt threatened to do so, a genuine agreement does not exist.
expenses + savings = earnings + borrowing
In a balanced budget, ...
liabilities
Money or debts you own to others are called _____.
10
Most experts recommend saving ____ percent of your disposable income each pay period.
True
Never sign a contract until you have read and understood it.
True
One big advantage of computerized record keeping is that information can be updated quickly and easily.
False
Only people with considerable wealth need to create a personal record keeping system.
consideration
Something of value exchanged for something else of value is called ________.
3
The IRS has the legal right to audit your tax returns and supporting records for ___ years from the date of filing.
False
The competence or legal ability of a person to enter a contract is called consideration.
True
The two elements to consider in budgeting and planning are your income and your expenses.
negotiable
The word _____ means legally collectible.
True
When assets are greater than liabilities, you are said to be solvent.
making a counteroffer
When one person makes an offer and another person changes it, the second person is....
disposable income
When preparing a budget, you need to focus mostly on your...
a contract involving the sale of a farmhouse
Which of the following contracts must be signed to be legally binding?
grocery bill
Which of the following is a variable expense?
a checking account
Which of the following would be considered an asset?
False
You should always create a monthly budget - weekly or biweekly budgets tend to be inaccurate.
disposable
Your ______ income is the money you have left to spend or save after taxes and other required deductions are taken.
Fixed
______ expenses are costs that do not change from month to month.
Variable
_________ expenses are costs that vary in amount and type, depending on the choices you make.
database
a computer program tha sorts data for easy search and retrieval
spreadsheet
a computer program that organizes data in columns and rows
contract
a legally enforceable agreement
co-signer
a person who agrees to pay the debt of another person
notarized
a process that verifies the signature of a person who signs a document
financial plan
a set of goals for spending, saving, and investing money
budget
a spending and savings plan
warranty
a statement assuring quality and performance of a product or service
negotiable
an instrument that is legally collectable
counteroffer
changing an original offer to make a new offer
variable expenses
costs that change in amount and type, based on your choices
fixed expenses
costs that do not change from month to month
liabilities
debts you owe to others
assets
items of value that you own
disposable income
money you have left to spend each month
consideration
something of value exchanged for something else of value
net worth
the difference between assets and liabilities