Assets & Liabilities
What is something you own that has value?
Asset
A bill that stays the same every month.
Fixed Cost
A safe place to deposit and withdraw money.
Checking Account
A detailed list of all goods and materials in stock.
Inventory
A required payment to the government.
Taxes
What is something you owe to someone else?
Liability
A cost that changes based on use or production.
Variable Cost
Money lent with interest.
Credit
Items used up or sold within one year.
Non-Depreciable Inventory
Benefits provided to employees in addition to wages.
Non-Wage Compensation
What are short-term debts due this year called?
Current Liabilities
The first step in creating a budget.
Assess your financial situation
A savings account with tax advantages for retirement.
IRA - Individual Retirement Account
Items with more than a one-year life that lose value with age and use.
Depreciable Inventory
The term for how much value something loses as it ages
Depreciation
What do you get when you add current + non-current assets?
Total Assets
What step comes after monitoring your spending patterns?
Compare budget to how much you spend
Name one tool you can use to access your checking account.
Checkbook, Debit Card, ATM Card
What is one example of a depreciable item?
Vehicles, Tractors, Equipment
What does “current” mean when classifying assets or liabilities?
Due or Usable Within 12 Months (1 Year)
Name two examples of non-current assets.
Land, Greenhouse, Equipment, Paid off vehicles, Paid off houses, Paid off phone, Paid off electronics
What is the final step in the budgeting process?
Review & revise as needed
What’s an example of non-wage compensation?
Insurance, Vacation Pay, Bonuses, Stock Options
What item is never depreciable?
LAND!!!! - Do not get this wrong on the test!!
What is credit based on?
The Borrower's Ability to Repay