Vocabulary Test

What is a budget ?

• A budget is a method for cooking meals.
• A budget is a type of investment strategy.
• A budget is a financial plan for managing income and expenses.
• A budget is a tool for measuring physical fitness.

What is credit?

• Credit is the ability to borrow money or access goods and services with the promise to pay later.
• Credit is the process of saving money for future purchases.
• Credit refers to the amount of cash one has in their bank account.
• Credit is a type of loan that must be repaid immediately.

What is a credit card?

• A credit card is a payment card that enables the holder to borrow funds for purchases.
• A credit card is a prepaid card that requires no repayment after use.
• A credit card is a card used exclusively for cash withdrawals from ATMs.
• A credit card is a type of loan that must be repaid in full each month.

What is the difference between debit and credit?

• Debits and credits are the same and have no impact on accounts.
• Debits decrease assets/expenses; credits decrease liabilities/equity.
• Debits are used only for cash transactions; credits are for credit transactions.
• Debits increase assets/expenses; credits increase liabilities/equity.

What Is a credit report used for ?

• A credit report is used to track personal expenses.
• A credit report is used to determine employment eligibility.
• A credit report is used to assess health insurance premiums.
• A credit report is used to evaluate creditworthiness for loans and credit applications.

What is a deductible ?

• A deductible is the total amount an insurance policy costs annually.
• A deductible is the maximum amount an insurance company will pay for a claim.
• A deductible is a type of insurance policy that covers all expenses without limits.
• A deductible is the out-of-pocket amount a policyholder pays before insurance coverage kicks in.

What is a principle?

• A principle is a fundamental truth or proposition that serves as a foundation for a system of belief or behavior.
• A principle is a synonym for a rule or regulation.
• A principle is a type of mathematical equation.
• A principle is an opinion that can change over time.

What is Insurance?

• Insurance is a type of investment for wealth accumulation.
• Insurance is a contract that provides financial protection against losses.
• Insurance is a service that guarantees profit in business ventures.
• Insurance is a government program that provides free healthcare.

What is a Asset?

• An asset is a resource with economic value owned by an individual or entity.
• An asset is a temporary expense that has no value.
• An asset is a type of debt that must be repaid.
• A liability is a resource owned by an individual or entity.

What is Income?

• Income is the money received, especially on a regular basis, for work or through investments.
• Income is a type of tax paid to the government.
• Income refers to the total amount of debt a person has.
• Income is the value of assets owned by an individual.