Income

Question 1

What is income?

Answer 1

Income is money enterprises receive from the sale of goods and services and from assets

Question 2

What is the most common form of income?

Answer 2

The most common form of income is income from sales.

Income from sales is known as
1) Revenue
or
2) Turnover

Question 3

What are the main types of revenue?

Answer 3

The main types of revenue are:
1) Cash sales
2) Credit sales
3) Commission received
4) Maintenance contracts
5) Repairs

Question 4

The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.

1) Cash sales:
What are cash sales?

Answer 4

Cash sales are from over-the-counter sales

Question 5

The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.

2) Credit sales:
What are credit sales?

Answer 5

Credit sales are from sales using a method of credit such as a credit card

Question 6

The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.

3) Commission received:
What is commission received?

Answer 6

Commission received is when an enterprise acts as an agent for another enterprise and receives a percentage of every sale

Question 7

The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.

4) Maintenance contracts:
What are maintenance contracts?

Answer 7

Maintenance contracts are when an enterprise agrees to regularly service a product, usually annually, to keep it in working order

Question 8

The main types of revenue are cash sales, credit sales, commission received, maintenance contracts and repairs.

5) Repairs:
What are repairs?

Answer 8

Repairs are when an enterprise repairs or services a product previously purchased by a customer

Question 9

Calculating revenue:
Revenue = ?

Answer 9

Revenue = Sales x Price per unit

Question 10

Calculating revenue:
Revenue = Sales x Price per unit.

For example, a high street mobile phone shop sells 15 phones at £600 per phone.

Revenue is:
?

Answer 10

For example, a high street mobile phone shop sells 15 phones at £600 per phone.

Revenue is:
Sales (15) x Price per unit (£600) = £9,000

Question 11

What is an asset?

Answer 11

An asset is something owned by an enterprise, such as property or equipment

Question 12

An asset is something owned by an enterprise, such as property or equipment.
An asset can be sold to …

Answer 12

An asset can be sold to generate income for the enterprise

Question 13

Ways to generate income from assets:
1) Invest in …

Answer 13

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits

Question 14

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put …

Answer 14

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest

Question 15

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell …

Answer 15

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell assets such as property or equipment to raise money

Question 16

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell assets such as property or equipment to raise money
4) Rent out …

Answer 16

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell assets such as property or equipment to raise money
4) Rent out part of the enterprise’s premises to another enterprise

Question 17

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell assets such as property or equipment to raise money
4) Rent out part of the enterprise’s premises to another enterprise
5) Lease or hire out …

Answer 17

Ways to generate income from assets:
1) Invest in another enterprise to receive a share of its profits
2) Put spare cash into an account that pays interest
3) Sell assets such as property or equipment to raise money
4) Rent out part of the enterprise’s premises to another enterprise
5) Lease or hire out equipment to another enterprise