PSF Terms (CH. 2)

liabilities

amounts owed to others

long-term liabilities

debts that are not required to be paid in full until more than a year from now.

current liabilities

debts that must be paid within a short time, usually less than a year.

take-home pay

earnings after deductions for tax and other items; also called disposable income.

discretionary income

money left over after paying for household, food, and other necessities.

income

inflows of cash to an individual or household.

cash flow

the actual inflow and outflow of cash during a given time period.

deficit

the amount by which actual spending exceeds palnned spending.

surplus

the amount by which actual spending is less than planned spending.

budget variance

the difference between the amount budgeted and the actual amount recieved and spent.

net worth

the difference between total assets and total liabilities.

insolvency

the inability to pay debts when they are due because liabilities far exceed the value of assets.

balance sheet

a financial statement that reports what an individual or a family owns and owes; also called a net worth statement or statement of financial position.

cash flow statement

a financial statement that summarizes cash reciepts and payments for a given period; also called a personal income and expenditure statement.

budget

a specific plan for spending income; also called a spending plan.