Types Of Income Flashcards
What is Capital income ?
Capital income is the money used to set up a business , it is a long term investment
What is revenue income ?
Revenue income is the income received by the business on sales of its goods and services
What are the 5 examples of Capital income ?
-Loan ,
-Mortgage ,
-Shares ,
-Owner’s Capital,
-Debentures ,
What are 6 examples of Revenue income ?
-Cash sales ,
-Credit sales ,
-Rent received ,
-Commission received ,
-Interest received ,
-Discount received ,
Capital income - Loan ?
Loan - money lent to ab business by an investor such as a bank . The business will pay back the loan with interest , usually in monthly instalments over a few years
Capital income - Mortgage ?
Mortgage - loan usually used to buy a property such as a business premises.
-The mortgage will be secured against the property purchased .
-The business will pay back the mortgage with interest usually over 25 years
Capital income - Shares ?
Shares - issued by the company to shareholders who own the business
-As investors in the business , shareholders may receive a dividend
Capital income - Owner’s Capital ?
Owner’s capital - the owner invests their personal savings into the business
Capital income - Debentures ?
Debentures - a type of bond issued by large companies to raise money
-investors receive interest on their loan which is repaid in full by the company on an agreed date
Revenue income - Cash sales ?
Cash Sales - through over the counter transactions
Revenue income - Credit sales ?
Credit sales - through sales using a method of credit
Revenue income - rent received ?
Rent received - when a business rents out a property that it owns
Revenue income - Commission received ?
Commission received - when a business acts as an agent for another business and receives a percentage of every sale
Revenue income - interest received ?
Interest received - money earned on saving and lending
Revenue income - Discount received ?
Discount received - when a business pay a reduced price for goods and services
