Money VocabBy: Brandon Kondis

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

Debit• An entry recording an amount owed, listed on the left-hand side or

column of an account

Interest• Money paid regularly at a particular rate for the use of money lent, or

for delaying the repayment of a debt.

Gross Pay• An amount of pay, wages, salary, or other compensation before

deductions, such as for taxes, insurance, and retirement.

Net Pay• The amount of wages that employees actually take home. In other

words, net pay is the amount of money on each employee paycheck. Employers deduct many different amounts from employee wages every pay period.

Fixed Expenses• Fixed expenses or costs are those that do not fluctuate with changes

in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.

Variable Expenses• Variable costs are those costs that vary depending on a company's

production volume; they rise as production increases and fall as production decreases. Variable costs differ from fixed costs such as rent, advertising, insurance and office supplies, which tend to remain the same regardless of production output.

Consumable Goods• Consumables (also known as consumable goods, nondurable goods,

or soft goods) are goods that, according to the 1913 edition of Webster's Dictionary, are capable of being consumed; that may be destroyed, dissipated, wasted, or spent.

Durable Goods• Goods not for immediate consumption and able to be kept for a

period of time.

FICA• Federal Insurance Contributions Act is a United States federal payroll

(or employment) tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, the disabled, and children of deceased workers.

Salary• A fixed regular payment, typically paid on a monthly or biweekly basis

but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

Discretionary Expenses• A discretionary expense is a cost which is not essential for the

operation of a home or a business. For example, a business may allow employees to charge certain meal and entertainment costs to the company in order to promote goodwill with employees.

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

Credit Score• A number assigned to a person that indicates to lenders their capacity

to repay a loan.

Financial Institution• An establishment that focuses on dealing with financial transactions,

such as investments, loans and deposits. Conventionally, financial institutions are composed of organizations such as banks, trust companies, insurance companies and investment dealers.

Mortgage• The charging of real (or personal) property by a debtor to a creditor as

security for a debt (especially one incurred by the purchase of the property), on the condition that it shall be returned on payment of the debt within a certain period.