Personal Finance

What are liabilities and provide an example of one?

Any amount owed (Car loan, home loan, mortgage, credit card)

What is the accounting Equation?

Assets = Liabilities + Owner Equity

Explain the difference between discretionary income and disposable income.

DISCRETIONARY INCOME: Amount of income that is left for extra spending, investing or saving AFTER all taxes AND expenditures (outflows) have been paid. DISPOSABLE INCOME: The amount of income that is left after all taxes and deductions have been taken out.

What is a cash flow statement?

Financial statement that reports net income, along with spending for a given time period.

What does a balance sheet measure?

Measures Financial Strength

Explain the difference between NET INCOME and GROSS INCOME.

NET INCOME: amount received after taxes and other deductions have been subtracted from total earnings. GROSS INCOME: Total wages prior to taxes and other deductions.

Explain what owner's Equity?

Amount remaining after the value of all LIABILITIES is subtracted from the value of all ASSETS.

What is an asset and provide an example?

Value of Items (Cash, Car, House)

If your net cash flow has the parenthesis (...) around the number, what does that mean?

You have a negative number.

Demonstrate how to create a formula for the following: a. Total Income b. Savings cell with a percentage c. Total Expenditures d. Net cash flow

a. net income + other income b. =sum(Total income*Percent) c. =sum(all of the expenditure added together.) d. =sum(Total income - total expendetures)