Income & Expenditure - Chapter 1 Flashcards
What is income?
Income is money or something of value received by a person or household.
Income can be regular or irregular.
What is regular income?
Regular income is money that is received every week or month. You can predict how much you will earn and depend on it. E.g. Wages, salaries, child benefit
What are wages?
Wages are weekly or monthly payment given to an employee in return for work.
What is unemployment benefit?
Unemployment benefit is weekly payment made to people who are seeking work
but unable to find work.
What is child benefit?
Child benefit is monthly payment by the state (government) paid to parents of
children aged 18 years and under while they are still in full time education.
What is a pension?
A pension is a weekly payment to people who are over the age of 65 and retired from work.
What is irregular income?
Irregular income 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. E.g. Overtime payments, commission, gifts.
What is Overtime?
Overtime is working more hours than normal. It is usually paid at a higher rate than regular income.
What is a bonus?
A bonus is an extra sum of money that may be paid to a worker if they reach an agreed target.
What is commission?
A salesperson is given a percentage of the selling price of the item they are selling to encourage him/her to sell as many as possible. The more they sell the more they earn e.g. 15% of the selling price.
What is interest?
Interest 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).
What is Benefit-in-Kind (BIK)?
Benefit in Kind is a non-financial (not money) reward. Some employees receive payment in the form of goods and services.
E.g. Company car, health insurance, discounted travel.
What is expenditure?
Expenditure is the amount of money that we spend over a particular period of time.
Expenditure can be fixed, irregular or discretionary.
What is fixed expenditure?
Fixed expenditure is a set amount of money that must be paid on a regular basis. Same amount, Same time.
Example: Mortgage
What is Irregular Expenditure?
Irregular Expenditure - 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
