Business: Expenditure/Budgets Flashcards
(14 cards)
What is Expenditure?
The way people spend their income to satisfy various needs and wants.
What are the types of Expenditure?
Fixed expenditure, Irregular expenditure, Discretionary expenditure.
What is Fixed Expenditure?
Means that the same amount of money is spent on a regular basis and does not change with usage.
What is Irregular Expenditure?
Is spending where the amounts involved change with usage.
What is Discretionary Expenditure?
Is spending on non-essential items that we choose to buy.
What is Current Expenditure?
Is repeated short-term spending.
What is Capital Expenditure?
Is long-term spending.
What is a Budget?
Is a financial plan for expected future income and expenditure.
What is Impulse Buying?
Buying something without planning.
What are False Economies?
When you save money now but spend more later.
What is a Budget Surplus?
Occurs when income is greater than expenditure.
What is a Budget Deficit?
Occurs when income is less than expenditure.
What is a Household Budget?
Subtract expenses from income to get net cash, Add opening cash to net cash to get closing cash, Use this month’s closing cash as next month’s opening cash.
What is a Balanced Budget?
Refers to a situation where income exactly equals expenditure.
