1.9 Financial Management Vocabulary

What is a Budget?

• A plan for saving money

• A financial plan that estimates income and expenses over a specific time period

• A document showing a business's profit

• A list of monthly expenses

What does an Income Statement show?

• A plan for future investments

• A summary of all assets

• A list of all debts

• A business's revenues, expenses, and profit over a specific period

What is Income?

• The expenses incurred by a business

• The total amount of money received by a business from its activities

• The total amount of money spent by a business

• The profit made by a business

What are Expenses?

• The costs incurred in the process of earning revenue

• The total revenue of a business

• The profit after all costs

• The money saved by a business

How is gross profit calculated?

• By dividing revenue by expenses

• By multiplying revenue by expenses

• By subtracting total expenses from total income

• By adding total revenue and total expenses

What is a Loss?

• When revenue equals expenses

• When there is no revenue

• When expenses exceed revenues

• When revenues exceed expenses

What is Financial Analysis?

• The creation of a budget

• The process of reviewing financial documents to make informed business decisions

• The calculation of taxes

• The process of saving money

What is a Credit Score?

• A summary of income

• A list of all debts

• A numerical rating that reflects a person’s creditworthiness based on their credit history

• A plan for future expenses

What is a Credit Report?

• A detailed record of an individual’s credit history prepared by a credit bureau

• A summary of monthly expenses

• A list of all assets

• A plan for future savings

What does the Debt-to-Income Ratio measure?

• Monthly debt payments in relation to their monthly income

• The total amount of debt

• The interest rate on loans

• The total income