What Do These Financial Terms Mean?

How much of a finance expert are you? Test your financial terminology vocabulary with this fairly easy finance quiz. Some of these terms might touch your day to day life, but others might now. They are all general knowledge terms, though, so it won't harm you to know what they mean.

  1. Account balance
    • the amount of money you have in one of your financial accounts
    • when your outgoings match your income
    • the difference between your income and your expenditure
  2. After-tax income
    • the amount of tax you pay on your income
    • the amount of income you have left after income taxes have been deducted
    • pre-tax income
  3. Annuity
    • a yearly statement for your financial accounts
    • the dividends that are paid on shares once every year
    • an insurance company product that’s designed to allow you to accumulate tax-deferred assets that can be converted to a source of lifetime annual income.
  4. Appreciation
    • praise from your accountant about how you're handling your financial affairs
    • when interest payments on loans increases
    • when an asset such as stock, real estate, or personal property increases in value without any improvements or modification having been made to it
  5. Arbitrage
    • the technique of simultaneously buying at a lower price in one market and selling at a higher price in another market to make a profit on the spread between the prices.
    • buying shares randomly in the hopes that one will increase in value over a period
    • putting a product on the market to sell to the highest bidder
  6. Asset
    • your financial statements
    • everything you own that has any monetary value, plus any money you are owed.
    • a profit making business
  7. Audit
    • a professional, independent examination of a company's financial statements
    • the history of all your expenditure
    • the process of making an acquisition
  8. Balance sheet
    • how much profit or loss your business makes
    • a statement of a company’s financial position at a particular moment in time.
    • a list of all a company's sources of income
  9. Bankruptcy
    • being insolvent, or unable to pay your debts
    • the formation of a bank or building society
    • asking a bank for a loan modification
  10. Bear market
    • a cheap place to buy teddy bears
    • a market experiencing rapid growth
    • a period of falling securities prices and sometimes, more specifically, as a market where prices have fallen 20% or more from the most recent high.