Financial Literacy 2nd 9 weeks Test

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What is a budget?

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A budget is a financial plan that outlines expected income and expenses over a specific period, helping individuals manage their finances.

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What are fixed expenses?

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Fixed expenses are costs that do not change from month to month, such as rent, mortgage payments, and car payments.

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What are variable expenses?

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Variable expenses are costs that can fluctuate each month, such as groceries, entertainment, and utility bills.

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What is an expenditure?

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An expenditure is an amount of money spent on goods or services.

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How do you calculate monthly expenses from annual expenses?

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To calculate monthly expenses from annual expenses, divide the total annual expenses by 12.

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What is the purpose of a check memo?

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The memo on a check is used to note the purpose of the payment, helping both the payer and payee keep track of transactions.

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What is the significance of a signature on a check?

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A signature on a check authorizes the bank to release funds from the account holder's account.

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What is the difference between needs and wants?

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Needs are essential items required for survival (like food and shelter), while wants are non-essential items that enhance quality of life.

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What is a partial budget?

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A partial budget is a financial tool used to analyze the costs and benefits of a specific change in a business or personal financial situation.

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What does it mean to overspend?

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Overspending occurs when expenses exceed the budgeted amount, leading to financial strain.