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Business & Finance Fundamentals Flashcards

6 cards from real MCVSD practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Business & Finance Fundamentals flashcards as text

  1. What is 'gross income' in personal finance?

    Answer: Income before any taxes or deductions

    Gross income is the total income earned before any taxes, deductions, or withholdings are applied.

  2. Which financial concept describes spreading investments across different assets to reduce risk?

    Answer: Diversification

    Diversification reduces financial risk by spreading investments across multiple asset types or sectors.

  3. What is the purpose of a W-2 form in the United States?

    Answer: To report annual wages and taxes withheld from employees

    A W-2 form reports an employee's annual wages and the amount of taxes withheld by their employer.

  4. In business, what does ROI stand for?

    Answer: Return on Investment

    ROI stands for Return on Investment, measuring the profitability of an investment relative to its cost.

  5. Which type of business structure offers personal liability protection to its owners while allowing pass-through taxation?

    Answer: Limited Liability Company (LLC)

    An LLC provides personal liability protection while allowing profits and losses to pass through to the owners' personal tax returns.

  6. What is compound interest?

    Answer: Interest earned on both the principal and previously accumulated interest

    Compound interest is interest calculated on both the initial principal and the interest previously accumulated.

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