This document defines key financial terms including: - Credit as the ability to obtain goods/services before payment based on future payment trust. - Debit as an amount owed listed on the left of an account. - Interest as money paid regularly for borrowing or delaying debt repayment. - Gross pay as total pay before taxes/deductions, while net pay is wages after withholdings. - Fixed expenses as constant costs regardless of sales, versus variable expenses varying with production.

1. Vocab

2. Credit
the ability of a customer to obtain goods or services before payment, based on the trust that payment
will be made in the future.

3. Debit
• an entry recording an amount owed, listed on the left-hand side or
column of an account.

4. Interest
• money paid regularly at a particular rate for the use of money lent, or
for delaying the repayment of a debt.

5. Gross pay
• The total amount of money you get before taxes or other deductions
are subtracted from your salary. Your gross income or pay is usually
not the same as your net pay especially if you must pay for taxes and
other benefits such as health insurance.

6. Net pay
• Home Insights & Resources Calculators and Tools Payroll Calculators.
Salary Paycheck Calculator. Paycheck Calculator. Estimates your net
pay which is wages after withholdings and taxes. Calculation based
on: Tax Year.

7. Fixed Expenses
• an expense that will be the same total amount regardless of changes
in the amount of sales

8. Variable Expenses
• A corporate expense that varies with production output.

9. Consumable Goods
• are products that consumers use recurrently

10. Durable goods
• goods not for immediate consumption and able to be kept for a
period of time.

11. FICA
• The Federal Insurance Contributions Act (FICA) is the federal law that
requires you to withhold three separate taxes from the wages you pay
your employees.

12. Salary
• A fixed regular payment, typically paid on a monthly or biweekly basis
but often expressed as an annual sum

13. Discretionary expenses
• A cost which is not essential for the operation of a home or a
business.

14. Budget
• An estimate of income and expenditure for a set period of time.

15. Credit Score
• A credit score is a three digit number calculated from your data-rich
credit report and is one factor used by lenders to determine your
creditworthiness for a mortgage, loan or credit card.

16. Financial Institution
• A financial institution is an establishment that conducts financial
transactions such as investments, loans and deposits.

17. Mortgage
• the charging of real property by a debtor to a creditor as security for a
debt, on the condition that it shall be returned on payment of the
debt within a certain period.