Expenditure And Income

Question 1

Income

Answer 1

Income is money or something of value received by a person or household.

Income can be regular or irregular.

Question 2

Regular income

Answer 2

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

Examples of regular income:
Wages
Salaries
Unemployment Benefit
Child Benefit
Pensions
Pocket Money

Question 3

Wages

Answer 3

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

Question 4

Unemployment Benefit

Answer 4

weekly payment made to people who are seeking work but unable to find work

Question 5

Child Benefit

Answer 5

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 6

Pensions

Answer 6

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

Question 7

Irregular Income

Answer 7

Is 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

Examples:
Overtime Payments
Commission
Bonus Payments
Gifts
Interest

Question 8

Overtime

Answer 8

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

Question 9

Bonus

Answer 9

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

Question 10

Commission

Answer 10

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 11

Interest

Answer 11

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 12

Benefit in Kind

Answer 12

is a non-financial (money) reward. Some employees receive payment in the form of goods and services.
These are called benefit-in-kind.

Examples of BIK:
Health Insurance
Company Car
Discounted / Free Meals
Discounted Travel

Question 13

Expenditure

Answer 13

Expenditure is the amount of money that we spend over a particular period of time.

Spending can be:
Fixed
Irregular
Discretionary

Question 14

Fixed Expenditure

Answer 14

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

Question 15

Irregular Expenditure

Answer 15

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 16

Discretionary Expenditure

Answer 16

‘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 17

Current expenditure

Answer 17

Current expenditure is 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 18

Capital expenditure

Answer 18

Capital expenditure is 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

Question 19

Opportunity cost:

Answer 19

is the item or service you do without (forgo) in order to buy another item or service.

Example: Jane goes to the shop with €1. She has the choice of a bar of chocolate or a can of orange. She buys the chocolate. Opportunity cost is the can of orange

Question 20

Financial Cost

Answer 20

Financial cost is the price (or monetary value) of an item.

Example: A bar of chocolate costs €1.20 in your local shop.
The financial cost of the bar of chocolate is €1.20.