Chapter 1-Financial Terms Flashcards

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Asset

Back

Anything that is owned by an individual, including money in the bank or investments

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Credit

Back

The granting of a loan and the creation of debt; any form of deferred payment

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Debt

Back

Money owed to another person or company

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Expense

Back

The cost of goods or services; money paid out

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Financial Literacy

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The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively

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Interest

Back

The additional cost a lender charges for borrowing their money

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Interest Rate

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The percentage of principal charged by the lender for use of its money

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Liability

Back

Financial debts or obligations

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Loan Shark

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Person or entity that charges borrowers interest rates above an established legal rate

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Negative Net Worth

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The dollar value of a person’s liabilities is larger than the value of their assets