6th Grade Financial Literacy Practice Test

What term means money owed?

Wages Expense Debt Credit

Correct Answer:

Debt

Explanation:

The main idea here is naming money you owe to someone else. When you borrow money or owe payments, that amount is called debt. It’s the exact word for what you owe. Wages are money you earn for working, not what you owe. An expense is money you spend to buy something or a cost you must pay, which is money going out, not the amount you owe. Credit can mean the ability to borrow or the balance on a charge account, but it isn’t the word for money you owe itself. Debt best fits the idea of money that is owed.

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