Income And Expenses Flashcards
What is personal income?
An individual’s total annual earnings from all sources such as wages, investments, dividends, rentals, profits and rentals.
What are the three types of personal income?
Cash flow from work
Cash flow from capital
Cash flow from land
Salaries are paid ____ and wages ____.
Weekly and monthly.
What is a salary or wage?
A regular payment in return for an individual’s Labour.
What are personal expenses?
All the costs you incur in your daily life. They are what it costs you to live life.
What is net Worth?
Your financial value at any given point.
Why do people calculate their net Worth?
So they can asses how much their wealth is growing from year to year.
What is a statement of net Worth?
A statement of your financial Worth at a specific time.
Why do accountants prepare statements of net Worth ?
To determine what a business is worth.
What do they take Into account when drawing up a personal statement of net Worth?
Assets,income,capital and borrowed capital and liabilities into account.
What is the statement of net Worth also known as?
A balance sheet.
Why are household or personal statements of net Worth important?
They help individuals and families to check how they are doing financially. This becomes important when making big decisions like buying a house or a car.
What does surplus mean?
When Income is more than expenses.
What is a deficit?
When expenses are more than the income.
What is a net Worth?
The total assets minus the total liabilities.
