Chapter 1 - Income and Expenditure Flashcards
Income
Money received by a person or household.
Regular Income
Money received weekly or monthly
Examples:
Wages, pension, unemployment benefit.
Irregular income
Money received from time to time (often without knowing when you will receive or how much money you will receive).
Examples:
Overtime payments, gifts, bonus payments.
Benefit-in-kind (BIK)
Perk that isn’t money in your hand but is worth having.
They are goods and services such as:
Company car, free/ discounted meals, discounts on goods.
Expenditure
Amount of money spent over particular period of time.
Examples:
Food, clothes, holidays.
Different types of expenditure
Fixed, irregular and discretionary expenditure.
Fixed expenditure
Mortgage, bin charges, health insurance.
Irregular expenditure
Electricity bills, car fuel, public transport.
Discretionary expenditure
Holiday, shopping spree, extra curricular activities.
What is current expenditure?
Spending money on day-to-day items that get used up within a year and only provide a benefit for a short period of time.
Examples:
Food, petrol, light and heat.
What is capital expenditure?
Spending money on items providing longer than a year of benefit, a long time.
Examples:
Washing machine, car, television.
What is opportunity cost?
Item or service you forgo in order to buy another item or service.
Financial cost
Price (monetary value) of an item.
Example:
Bar of chocolate in local shop costs €1.20.
€1.20 is the financial cost of it.
Key terms- Do you know the definitions to these?
(Regular & Irregular) income, child benefit, state/ private/ personal pension, BIK, spreadsheets.
Key terms 2- Do you know the definitions to these?
(Fixed, Irregular & Discretionary) expenditure, current expenditure, capital expenditure, consumer durables, opportunity cost.
