Ch. 16 - Key Terms Review

A _ is an amount that reduces the taxable income.

• Earned income

• Taxable Income

• Tax deduction

• Exemption

An _ is the amount of money you plan to use for a certain budget category.

• Allowance

• Tax credit

• Tax deduction

• Personal assets

A _ is a report that summarizes your current financial condition, acknowledges your financial needs, and sets a direction for your future financial activities.

• Cash flow statement

• Budget variance

• Exemption

• Financial plan

_ refers to the day-to-day financial activities associated with using limited income to satisfy your unlimited needs and wants.

• Variable expenses

• Money management

• Personal assets

• Fixed expenses

_ involve living costs that differ each time and may not be as easy to estimate.

• Variable expenses

• Estate planning

• Personal assets

• Investment income

The difference between a person’s assets and liabilities is your _.

• Allowance

• Budget variance

• Net worth

• Exemption

A person’s taxes can be reduced by a _, an amount subtracted directly from taxes owed.

• Exemption

• Tax deduction

• Tax credit

• Individual Retirement Account (IRA)

_ results from wages, salary, commission, fees, tips, and bonuses.

• Money management

• Personal assets

• Taxable income

• Earned income

_ involves the accumulation and management of property during one’s lifetime and the distribution of one’s property at death.

• Estate planning

• Individual Retirement Account (IRA)

• Financial planning

• Investment income

A _ reports net wages and other income along with spending for a period, such as for a month.

• Financial plan

• Money management

• Cash flow statement

• Investment income