Financial Terms Flashcards

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Consumer

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A person or organization that uses a product or service.

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Debt

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Money owed to another person or company.

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Expense

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The cost of goods or services; money paid out.

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Financial Plan

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A plan of action that allows a person to meet not only their immediate needs but also their long-term goals.

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Interest

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The additional cost a lender charges for borrowing their money.

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Paycheck to Paycheck

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An expression used to describe a person or household whose monthly income is devoted to expenses and has little to no savings.

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Cash-Flow Statement

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A record that summarizes all of the income and outgo (spending) over a certain time period.

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Gross Income vs Net Income

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Gross income is earned before deductions, while net income is what remains after payroll taxes and deductions.

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Accrued Interest Definition

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Interest that accumulates on a debt but is not yet collected.

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Depreciating Asset

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An asset that loses value over time, such as a car that’s worth less every year.