Types of income

Question 1

What is capital income

Answer 1

Long term sources of income used to fund the purchase of non current assets(items of value that a business owns and will stay in the business for over a year)

Question 2

What is revenue income

Answer 2

Income that comes into a business from its trading activities e.g sales of goods/services

Question 3

Types of capital income

Answer 3

Loan(repaid over a set period of time/can be secured against an asset)
Mortgages
Shares
Owners capital(money invested by the owner of a business)
Debentures

Question 4

What are debentures

Answer 4

Lump sum given to business at a certain that must be paid back in full as a lump sum at an agreed date
Interest paid throughout the period of time
Normally secured against an asset

Question 5

Types of revenue income

Answer 5

Cash sales
Credit sales(delay between transaction and receipt of income)
Rent received
Commission received(payments received in return for sales made of another businesses products, paid as a percentage of the sale)
Interest received(positive balances at the bank)
Discount received