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A+F Final Test Revision
Terms in this set (29)
difference between need and want
need - essentials necessary to maintain life
want - things we wish to have, but don't threaten our existence
What do we call the professionals who can help you plan and manage your financial future?
difference between salary and wage
A salarised person is paid a fixed amount per pay period, the total of these fixed payments over a full year amounts to their salary. whilst a wage earner is paid by the hour
difference between gross and net pay
Gross pay - amount of money you earn before any payroll deductions.
Net/Take Home pay - amount of money you take home [gross pay - payroll deductions]
examples of payroll deductions
Income Tax, Medicare tax, health insurance deduction, union fees.
amount of money we pay for something
difference between fixed expense and variable expense
fixed expense - money spent on something that remains the same amount each month
e.g. rent, insurance, mobile phone payment
variable expense - expense that fluctuates monthly
e.g. petrol, groceries, eating out, entertainment
what's the main deduction taken from your pay?
All employees pay goes directly into their bank account (cheque or savings). What is this known as?
what does your employer need to make a direct deposit?
Bank BSB number and your account number.
a spending plan for managing money during a given period of time. detailed estimate of income and expenses for a specific period of time
amount earned on the principal in a savings account or on an investment
What are the names of the "Big 4 Banks" in Australia?
Commonwealth Bank of Australia, Westpac, NAB, ANZ
When you deposit money into your bank account (savings/cheque) what happens to that money/what does your bank do with it?
-bank loans the money to consumers, businesses, and government agencies, who spend it for their needs.
-money cycles through the economy w/ financial institutes putting them into loans/investments.
difference between a debit card and a credit card?
-money in debit card is deducted directly from the customer's own bank account when a purchase is made.
-credit card allows cardholder to use funds from a credit card company up to a certain limit w/ specific rules for paying back the money with interest charged.
statement prepared by your employer which reports your annual wages + amount of taxes withheld from your pay. info used to complete an income tax form.
-received @ end of tax year
when private information (e.g. TFN) is stolen and used without permission, usually to commit financial fraud.
When choosing a credit card, would you want one with a high or low annual percentage rate - interest rate? Why?
low to pay back less
numerical summary of the information contained in your credit report
detailed accounting of an individual's credit history, or a record that demonstrates responsibility in paying back loans.
what does credit score affect?
affects how much and what loan terms (e.g. interest rate, payment schedule) lenders will offer you at a given time.
how is credit score measured?
Credit scores range from 300-850; and the higher the score, the better.
name of the most popular employer-sponsored retirement plan?
What is superannuation?
plan which employees to have a percentage of their salary deducted from their pay each pay period and invested by their superannuation fund for retirement.
-9.5% of wage is contributed in Australia
difference between saving and investing?
savings - money earned and put away in a safe, accessible place, usually your bank account.
investing - money used to create wealth over time, including shares and property.
units of ownership in a particular company
Individual or entities that purchase shares of stock in a company
why do companies sell shares?
-start up and operate their business
-expand their operation
-make product improvements
-develop new products
-update their buildings
What is the name of the place where shares are traded in Australia —that is, bought and sold.
Australian Stock Exchange
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