Capital And Revenue Income

Question 1

What is capital income ?

Answer 1

Money used to setup a business

Question 2

Examples of capital income (5)

Answer 2

Mortgage
Owners capital
Loan
Shares
Debenture

Question 3

Tell me about debentures
(Normally secured against an asset)

Answer 3

Long term loan issued by a company to raise capital. Investor becomes debenture holder when they invest. They receive interest and get repaid by the company on an agreed date

Question 4

What is revenue income

Answer 4

Income received on the sale of goods and services

Question 5

Examples of revenue income (6)

Answer 5

Interest received
Cash sales - money coming into the business from sales of goods and services
-Credit sales
-Rent received
-Discount received
-Commission received