(C2) Types of Income Flashcards
What is income?
The money received by a business
What are the types of income?
- Capital Income
- Revenue Income
What is capital income?
The money which is a long term investment used to set up a business
Types of Capital Income
- Loans
- Mortgages
- Shares
- Owner’s Capital
- Debentures
What is owner’s capital?
When the owner invest their own money into a business
What is debentures?
A type of bond issued by large companies to raise money
What is revenue income?
The income that is received by a business from the sale of its goods and service
Types of Revenue Income
- Cash Sales
- Credit Sales
- Rent Received
- Commission Received
- Interest Received
- Discount Received
What are cash sales?
A payment made only once when the product is brought
What are credit sales?
Sales made with credit so the payment is made later
What is rent received?
When a business rents out a property it owns
What is commissions received?
When a business acts on the behalf of another business and receive a percentage of the sale
What is interest received?
Money that is earned on savings or lending
What is discount received?
When a business pays a reduced price for goods or services
