Wise Practice Test

budget variance. - Answer- the difference between the budgeted amount and the actual amount that you spend debt ratio - Answer- shows the relationship between debt and net worth. debt ratio - Answer- The lower the ratio the better off financially the person is. debt ratio - Answer- calculated by dividing liabilities by net worth excise tax - Answer- government imposes a tax on specific goods and services such as alcohol, cigarettes, gasoline, and airline capital gains - Answer- are profits made from the sale of capital assets such as stocks and bonds Capital gains - Answer- tax deferred until the asset is sold, Capital Gains Tax - Answer- If held over one year are considered long-term capital gains and are taxed at a lower tax rate or in some cases are not taxed at all. variable expenses - Answer- change from one period to another,examples Electricity and food expenditures get advice from your friends - Answer- will help you the least in managing your money? Financial planning - Answer- the process of developing and implementing a coordinated series of actions to achieve financial success. Financial planning - Answer- need to be reviewed and adjusted to accommodate changing needs and goals. emergency fund - Answer- Should be an important consideration when saving money liquidity - Answer- being in cash or easily convertible to cash, How easily an asset can be converted into cash Social Security - Answer- benefits depends on the person?s earnings over a lifetime of work