Income Flashcards
What is income?
Income is money enterprises receive from the sale of goods and services and from assets
What is the most common form of income?
The most common form of income is income from sales.
Income from sales is known as
1) Revenue
or
2) Turnover
What are the main types of revenue?
The main types of revenue are:
1) Cash sales
2) Credit sales
3) Commission received
4) Maintenance contracts
5) Repairs
The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.
1) Cash sales:
What are cash sales?
Cash sales are from over-the-counter sales
The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.
2) Credit sales:
What are credit sales?
Credit sales are from sales using a method of credit such as a credit card
The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.
3) Commission received:
What is commission received?
Commission received is when an enterprise acts as an agent for another enterprise and receives a percentage of every sale
The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.
4) Maintenance contracts:
What are maintenance contracts?
Maintenance contracts are when an enterprise agrees to regularly service a product, usually annually, to keep it in working order
The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.
5) Repairs:
What are repairs?
Repairs are when an enterprise repairs or services a product previously purchased by a customer
Calculating revenue:
Revenue = ?
Revenue = Sales x Price per unit
Calculating revenue:
Revenue = Sales x Price per unit.
For example, a high street mobile phone shop sells 15 phones at £600 per phone.
Revenue is:
?
For example, a high street mobile phone shop sells 15 phones at £600 per phone.
Revenue is:
Sales (15) x Price per unit (£600) = £9,000
What is an asset?
An asset is something owned by an enterprise, such as property or equipment
An asset is something owned by an enterprise, such as property or equipment.
An asset can be sold to …
An asset can be sold to generate income for the enterprise
Ways to generate income from assets:
1) Invest in …
Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put …
Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell …
Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell assets such as property or equipment to raise money