PERSONAL FINANCE TEST-D

Defined Benefit Plan What Does Defined-Benefit Plan Mean? An employer-sponsored retirement plan where employee benefits are sorted out based on a formula using factors such as salary history and duration of employment.

Financial Planning Financial planning is one of the most important topics you’ll ever learn. A bad financial plan can leave you homeless; a good plan can provide you and your family with a comfortable life.

FYI But before you begin analyzing ways to invest and manage your money, make sure you understand the fundamental principles of financial planning. Mastering the principles will equip you for almost inevitable success — not doing so will make you a sitting duck

Variable expense Variable expenses change depending on your consumption of a good or service. A variable expense is a cost that changes significantly from period to period, such as week to week, month to month, quarter to quarter or year to year.

FYI Typical household variable expenses are household maintenance expenses such as painting or yard care, general expenses such as clothing, groceries, and car maintenance and fuel, and utilities such as electricity, gas and water.

Fixed expense Fixed and variable expenses are the two main components of a company's total overhead expense. Fixed costs are those that do not fluctuate with changes in production activity level or sales volume, such as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.

VARIABLE Variable costs are those that respond directly and proportionately to changes in activity level or volume, such as raw materials, hourly wages and commissions, utilities, inventory, office supplies, and packaging, mailing, and shipping costs.

Budget variance Difference between the actual amount incurred or realized, and the corresponding forecasted (budgeted) figure.amountrealized NYC—EXTRA COST OF SNOW STORM NYC EXTRA COST FOR SECURITY

EXCISE TAX An excise tax is a tax on use or consumption of certain products. Excise taxes are sometimes included in the price of a product, such as motor fuels, cigarettes, and alcohol..

FYI Excise taxes may also be imposed on some activities, like gambling. Excise taxes may be imposed by the federal government or by a state

DEBIT CARD A debit card (also known as a bank card or check card) is a plastic card that provides an alternative payment method to cash when making purchases. cash Functionally, it can be called an electronic check,

fyi as the funds are withdrawn directly from either the bank account, or from the remaining balance on the card.bank account In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card

DEBT RATIO Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill'). THE LOWER THE RATIO THE MORE SECURED THE CORP ISfinancial ratio assetsdebttotal debtcurrent liabilitieslong-term liabilitiestotal assetscurrent assetsfixed assetsgoodwill

CAPITAL GAINES Capital gains tax rates are determined by the type of investment asset and the holding period.In additional to the federal capital gains tax rates, your capital gains will also be subject to state income taxes. Most states do not have separate capital gains tax rates. Instead, most state will tax your capital gains as ordinary income subject to the state income taxes

CAPITAL GAINES A capital gains tax (CGT) is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price..taxcapital gains asset

fyi The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations

DISCRETIONARY INCOME The amount of an individual's income available for spending after the essentials (such as food, clothing, and shelter) have been taken care of.amountincomefoodcare

What Does Discretionary Income Mean? What Does Discretionary Income Mean? The amount of an individual's income that is left for spending, investing or saving after taxes and personal necessities (such as food, shelter, and clothing) have been paid. Discretionary income includes money spent on luxury items, vacations and non-essential goods and services. saving

fyi Discretionary income is derived from disposable income, which equals gross income minus taxes. income

budget What Does Budget Mean? An estimation of the revenue and expenses over a specified future period of time. A budget can be made for a person, family, group of people, business, government, country, multinational organization or just about anything else that makes and spends money.money

fyi A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another.

ROTH IRA An individual retirement plan that bears many similarities to the traditional IRA, but contributions are not tax deductible and qualified distributions are tax free. Similar to other retirement plan accounts, non-qualified distributions from a Roth IRA may be subject to a penalty upon withdrawl.individual retirement plan

MARGINE. The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.

fyi Buying with borrowed money can be extremely risky because both gains and losses are amplified. That is, while the potential for greater profit exists, this comes at a hefty price – the potential for greater losses.

fyi Margin also subjects the investor to a number of unique risks such as interest payments for use of the borrowed money. INVESTOR BORROWS UP TO 50%

US TRESARY BILL A negotiable debt obligation issued by thenegotiabledebtobligation U.S. government and backed by its fullUgovernmentfull faith and credit, having a maturity of onefaith and creditmaturity year or less. U.S. Treasury Bills are exempt from state and local taxes.U.S. Treasury exemptlocaltaxes