PFM CHAPTER 8 QUESTIONS &
SOLUTIONS(RATED A+)
disposable income - ANSWER money you have left to spend or save after taxes and
other required deductions are taken
financial plan - ANSWER a set of goals for spending, saving, and investing the money
you receive
budget - ANSWER a spending and saving plan based on your expected income and
expenses. Money coming in must equal money going out
fixed expenses - ANSWER costs that do not change from month to month. You are
obligated to pay them regardless of income change.
variable expenses - ANSWER costs that vary in amount and type, depending on the
choices you make
assets - ANSWER items of value that a person owns
liabilities - ANSWER money or debts you owe to others
net worth - ANSWER the difference when you subtract your liabilities from your assets
co-signer - ANSWER a person who promises to pay the debt of another person
warranty/guarantee - ANSWER a statement assuring quality and performance of a
product or service
spreadsheet - ANSWER a computer program that organizes data in columns and rows
and can perform calculations using the data
personal property inventory - ANSWER a list of the valuable times you own, along with
their purchase prices and approximate current values
tax records - ANSWER the tax return, W-2 forms, and other receipts verifying income
and expenses listed on each return
contract - ANSWER a legally enforceable agreement between two or more people
counteroffer - ANSWER a new offer that changes the original offer
notarized - ANSWER the signature is verified by a notary public, who then applies a
notary seal
SOLUTIONS(RATED A+)
disposable income - ANSWER money you have left to spend or save after taxes and
other required deductions are taken
financial plan - ANSWER a set of goals for spending, saving, and investing the money
you receive
budget - ANSWER a spending and saving plan based on your expected income and
expenses. Money coming in must equal money going out
fixed expenses - ANSWER costs that do not change from month to month. You are
obligated to pay them regardless of income change.
variable expenses - ANSWER costs that vary in amount and type, depending on the
choices you make
assets - ANSWER items of value that a person owns
liabilities - ANSWER money or debts you owe to others
net worth - ANSWER the difference when you subtract your liabilities from your assets
co-signer - ANSWER a person who promises to pay the debt of another person
warranty/guarantee - ANSWER a statement assuring quality and performance of a
product or service
spreadsheet - ANSWER a computer program that organizes data in columns and rows
and can perform calculations using the data
personal property inventory - ANSWER a list of the valuable times you own, along with
their purchase prices and approximate current values
tax records - ANSWER the tax return, W-2 forms, and other receipts verifying income
and expenses listed on each return
contract - ANSWER a legally enforceable agreement between two or more people
counteroffer - ANSWER a new offer that changes the original offer
notarized - ANSWER the signature is verified by a notary public, who then applies a
notary seal
