Family Finance Exam 1 Chapter 3

Front 1

The essential first step in budgeting occurs in the ____________________ phase of budgeting.

Back 1

Goal-setting

Front 2

Budgeting that recognizes earnings and expenditures when the money is earned and the expenses incurred, regardless of when the money is actually received or paid, is known as

Back 2

Accrual basis budgeting.

Front 3

The phase of budgeting that is focused on setting up the structure and mechanics of the budget is the

Back 3

Organization Phase

Front 4

Projected dollar amounts in a budget that one plans and expects to receive or spend during the budgeting time period are called

Back 4

Budget Estimates

Front 5

The amount remaining after all budget classification deficits are subtracted from those with surplus is

Back 5

Net Surplus

Front 6

A useful tool to help balance out the variations in income and expenditures

Back 6

Revolving Savings Fund

Front 7

Income received after taxes and all other employer withholdings.

Back 7

Disposable Income

Front 8

What college savings methods requires that the earnings of the funds be taxed at the parent's marginal tax rate when the earnings exceed $1600 per year?

Back 8

Custodial account

Front 9

Most important in adding accuracy to long-term goals?

Back 9

Adjusting for inflation

Front 10

The phase of budgeting that focuses on the financial aspects of budgeting and on where funds will come from and where they should go is the

Back 10

Decision-Making Phase

Front 11

Money left over after funding the necessities of living is called

Back 11

Discretionary income.

Front 12

Because most people have higher levels of potential expenditures than their level of income they will need to do what as an integral part of the decision-making phase of budgeting?

Back 12

Reconcile Budget Estimates

Front 13

Two key tasks in the implementation phase of budgeting are the creation of

Back 13

A cash flow calendar and a revolving savings fund.

Front 14

A sheet of paper, form, booklet, or computer file for maintaining income and expenditure records is referred to as a

Back 14

Ledger

Front 15

Recognizes earnings and expenditures when money is actually received or paid out.

Back 15

Cash Basis Budgeting

Front 16

The recording of actual income and expenditures occurs in the ... phase of budgeting.

Back 16

Implementation

Front 17

A useful control mechanism in budgeting is

Back 17

The justification of budget exceptions.

Front 18

Annual estimated income and expenses are recorded for budget time periods in order to identify surplus or deficit situations

Back 18

A cash-flow calendar

Front 19

Money left over after paying for the necessities of living is called

Back 19

Discretionary income.

Front 20

Because what you plan to spend is generally more that what you expect to earn, an important step in the decision-making phase of budgeting is

Back 20

Reconciling budget estimates.

Front 21

The way to understand why some expenditures were higher or lower than expected is to engage in

Back 21

Variance analysis.