Chapter 16 Money Management and Financial
True
A budget can help you buy wisely and avoid credit problems.
True
A difference between actual spending and budgeted spending is called a budget variance.
False
A gift tax is based on the value of a person's property at death.
Create a balance sheet and cash flow statement
A good first step in financial planning would be to
All are true
A person's taxes can be reduced by (a) exemptions (b) a tax credit (c) donations (d) all are true
Net Income
A personal balance sheet would report all of following EXCEPT
False
A record of your assets and liabilities is called a cash flow statement.
Financial Planning
A report that summarizes your current financial condition and sets a direction for future financial activities.
Pension
A series of regular payments made to a retired worker under an organized plan.
False
A tax deduction is an amount that increases taxable income.
True
A tax is charge imposed by federal state, and local governments to finance public services.
Cash Outflows
Amounts spent for food, clothing, and other living costs.
Annunity
An amount of money an insurance company pays to a person who has previously deposited money with the company.
False
An expense is the amount of money you plan to use for a certain budget category.
False
Estate planning is the process of purchasing a large mansion and surrounding property.
First
Setting financial goals is ________ step in creating and using a budget.
Cash flow statement
Which of the following can BEST help you develop budget categories and provide a basis for your budget?
Rent
Which of the following is a fixed expense?
True
Your financial needs will change as you move through your life.
Fixed; variable
expenses occur regularly and are for the same amount; variable expenses differ each time.
Financial plan
includes evaluation your financial position and setting financial goals.
A(n) tax deduction
is an amount that reduces taxable income.
Money management
refers to the day-to-day financial activities associated with using limited income to satisfy unlimited needs and wants.
A(a) cash flow statement
reports net wages and other income along with spending food.
Personal Assets
Items of value, such as bank accounts, jewelry, and automobiles.
Deficit
Occurs when actual spending is greater than budgeted spending.
Surplus
Occurs when actual spending is less than budgeted spending.
After taxes and deductions
Take home pay is the amount you have left in your bills for this week
Internal Revenue Service
The agency responsible for collecting federal income tax.
Net Income
The amount of a paycheck after taxes and other payroll deductions.
Taxable Income
The amount on which taxes are calculated after adjustments, deductions, and exemptions.
Net Worth
The difference between your personal assets and personal liabilities is your
Unemployment insurance
This insurance provides cash payments for a limited time to individuals who are out of work for a reason other than illness.
Real estate property tax
This tax is based upon the value of land and buildings.
True
Using your checkbook as a budgeting system does not serve the planning for spending.