Unit 1 Topic 9 Flashcards
Define ‘budget balance’
Total income minus total expenditure: a person’s net financial situation.
What is budget deficit?
A situation in which outgoings exceed income.
What is budget surplus?
A sum of money available once all the essential expenditure in a given period had been made.
What is a cash flow forecast?
A plan of expected incomings and outgoings over several time periods.
What is discretionary expenditure?
Voluntary spending on products and services that people want now, and savings towards items they aspire to buy in the future.
Define ‘duty’
The tax paid on certain items, including fuel, cigarettes and alcohol.
What is essential expenditure?
Spending on items required to live, eg rent or mortgage repayments, food and drink, water supplies, gas and electricity.
What is income tax?
Tax paid on earnings from employment, self-employment and interest on savings.
What is mandatory expenditure?
Compulsory outgoings: they don’t necessarily apply to everyone but if they do apply they must be paid.
What are national insurance contributions?
Money deducted from the pay of people who are employed or self-employed and used by the government to fund state pensions and other benefits.
What is the office for National Statistics?
The independent organisation that produces statistics on many aspects of life in the UK such as employment, health, life expectancy in different areas, housing, etc.
Define ‘real terms’
A value adjusted to account for changes in prices.
Define ‘self-employment’
Earning an income by selling your goods or services directly to a consumer, rather than being employed by somebody else and being paid a wage or salary.
What is a utility?
An essential public service, such as electricity, gas, water and sewerage.
What is a budget?
A financial plan that shows a persons income and expenditure for a defined period of time.
