types of income

Question 1

what does income mean?

Answer 1

Income is the money coming into a business

Question 2

what is capital income?

Answer 2

Capital income is the money invested by owners of the business or other investors that is used to set up a business or buy additional equipment.

E.g. premises, vehicles or equipment. These are called fixed assets.

Question 3

what are fixed assets?

Answer 3

Items of value owned by the business that are likely to stay in the business for more than one year.
E.g. machinery. Also known as
non-current assets or capital items

Question 4

What types of capital income might there be?

Answer 4

• Loans
• Mortgages
• Shares
• Owner’s capital
• Debentures

Question 5

what is a debenture?

Answer 5

A debenture is a long term loan which is usually secured against a specific asset (e.g. the factory) or the overall assets of a business.
A debenture is repayable at a fixed date and has a fixed rate of interest.

Question 6

what is revenue income?

Answer 6

Revenue income is the money coming into the business from performing its day-to-day function-selling goods or providing a service.

Question 7

what are examples of revenue income?

Answer 7

• Sales
• Rent received
• Commission received
• Interest received
• Discount received

Question 8

what is commission?

Answer 8

A commission is a fee paid to a salesperson in exchange for
services in facilitating or completing a sales transaction. Can be a flat fee or a percentage.