Chapter 1: Income and Expenditure

Question 1

Income

Answer 1

Money or something of value received by a person or household. Income can be regular or irregular.

Question 2

Regular Income

Answer 2

Money that is received every week or month. You can predict how much you will earn and depend on it.

Question 3

Examples of Regular Income (6)

Answer 3

1. Wages
2. Salaries
3. Unemployment Benefit
4. Child Benefit
5. Pensions
6. Pocket Money

Question 4

Wages

Answer 4

Weekly or monthly payment given to an employee in return for work.

Question 5

Unemployment Benefit

Answer 5

Weekly payment made to people who are seeking work but unable to find work.

Question 6

Child Benefit

Answer 6

Monthly payment by the state (government) paid to parents of children aged 18 years and under while they are still in full time education.

Question 7

Pensions

Answer 7

Weekly payment to people who are over the age of 65 and retired from work.

Question 8

Irregular Income

Answer 8

Money that is received from time to time. Often, you do not know how much or when you will receive the money. You cannot depend on it.

Question 9

Examples of Irregular Income (5)

Answer 9

1. Overtime Payments
2. Commission
3. Bonus Payments
4. Gifts
5. Interest

Question 10

Overtime

Answer 10

Working more hours than normal. It is usually paid at a higher rate than regular income.

Question 11

Bonus

Answer 11

An extra sum of money that may be paid to a worker if they reach an agreed target.

Question 12

Commission

Answer 12

A salesperson is given a percentage of the selling price to encourage him/her to sell. The more they sell the more they earn. e.g. 15% of the selling price.

Question 13

Interest

Answer 13

This is money earned from investing your money. E.g. giving a business man €1000 to start a business and he will pay you back €1000 plus 2% (€1020).

Question 14

Benefit-in-Kind (BIK)

Answer 14

A non-financial (money) reward. Some employees receive payment in the form of goods and services.

Question 15

Examples of BIK (5)

Answer 15

1. Health Insurance
2. Company Car
3. Discounted / Free Meals
4. Discounted Travel
5. Discounts on goods

Question 16

Expenditure

Answer 16

The amount of money that we spend over a particular period of time. Spending can be fixed, irregular or discretionary.

Question 17

Fixed Expenditure

Answer 17

This is a set amount of money that must be paid on a regular basis. Same amount, Same time. Example: Mortgage.

Question 18

Irregular Expenditure

Answer 18

The amount and timing of this type of spending changes on a regular basis and will depend on how much or how little we use. Example: Electricity.

Question 19

Discretionary Expenditure

Answer 19

‘Fun spending’ this is money that is spent on non-essential items and should only be spent after fixed and irregular items have been paid for. Example: Cinema.

Question 20

Current Expenditure

Answer 20

Spending money on day-to-day items that get used up within one year and only provide a benefit for a short period of time.
Examples: Food (groceries), light and heat.

Question 21

Capital Expenditure

Answer 21

Spending money on items that will provide a benefit for longer than one year and will provide benefit for a long time.
Examples: car, washing machine.