Unit 3 - C2 - Ms Powell Flashcards
What are the 5 types of Capital Income?
Owners Capital, Debentures, Shares, Mortgage and Loan
What is meant by Capital Income?
Income is money used to set up a business. It’s a long-term investment.
What is meant by 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.
What is meant by a Loan
Money leant to a 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.
What is meant by Owners Capital?
The owner invests their personal savings in the business. The owner may be a sole trader or a partnership.
What is meant by Shares?a
Issued by the company to shareholders who own the business. As investors in the business, shareholders may receive a dividend.
What is meant by Revenue Income?
This is income received by the business on sales of its goods or services.
What are examples of revenue income?
Cash sales, Credit sales, Rent received, Commission received, Interest received, Discount received.
What is Cash sales?
Through over the counter transactions
What is credit sales?
Through sales using a method of credit
What is rent recieved?
When a business rents out a property it owns
What is commission received?
When a business acts as an agent for another business and receives a percentage of every sale
What is interest received?
Money earned on savings or lwnding
What is interest received?
Money earned on savings or lwnding
What is meant by discount received?
When a business pays a reduced price for goods or services.
