Chapter 2 - Income And Expenditure

Question 1

What is income?

Answer 1

A predictable amount of money received every week or month

Question 2

What is the difference between regular and irregulars expenditure?

Answer 2

Regular income is a predictable amount of money received every week or month.
Irregular Expenditure is unpredictable in size and frequency

Question 3

What is Child Benefit?

Answer 3

A monthly social welfare payment paid by the state to all parents or guardians of children up to the age of 18

Question 4

What are unemployment benefits?

Answer 4

Paid by the state to people who are out of work to provide them with a basic level of income.

Question 5

What is Benefit in Kind? List 3 examples of Benefits in kind

Answer 5

B.I.K are things that you get for free form an employer that you would otherwise have to pay for.
Payment of phone bills
Memberships
A Company car
Health insurance
Free workplace meals

Question 6

What is Expenditure?

Answer 6

The amount of money that we spend over a particular period of time.

Question 7

Explain fixed, Discretionary and irregular expenditure.

Answer 7

Fixed: Refers to a predictable sum of money that has to be paid out regularly
Discretionary: Any sums spent on non-essential items
Irregular: An unpredictable sum of money that has to be paid out regularly

Question 8

What is meant by the term ‘Opportunity Cost’

Answer 8

Opportunity cost refers to the item you must do without in order to buy another item