Bus. Found - 1.9.8 Income Sources and Expenditures

What is the definition of income?

• Money spent on goods and services

• Money received by an individual or business in exchange for work, goods, services, or investments

• Money borrowed from a bank

• Money saved in a bank account

Which of the following best describes expenditure?

• Money coming in

• Money going out

• Money saved

• Money borrowed

Income is also known as:

• Money going out

• Money coming in

• Money borrowed

• Money lost

Why is it important for businesses to know where their money comes from?

• To avoid paying taxes

• To plan operations, pay expenses, and measure profitability.

• To spend more money

• To increase debt

A business receives money from selling products. This money is considered a source of:

• Expenditure

• Income

• Debt

• Loan

If a business wants to measure its profitability, which two financial equation would they use?

• Income - Expenditure

• Savings + Loans

• Assets - Liabilities

• Expenditure + Income

A business notices that its expenditures are higher than its income for several months. What should the business consider doing to improve its financial situation?

• Increase expenditures further

• Ignore the difference

• Find ways to increase income or reduce expenditures

• Stop tracking finances

What type of expenditure is used for seasonal decorations/merchandise, travel for conferences or trade shows.

• Variable

• Discretionary

• Unexpected

• Fixed

What type of expenditure is used for wages for hourly employees (varies with hours worked).

• Variable

• Discretionary

• Unexpected

• Fixed

What type of expenditure stays the same each month, like rent or mortgage for office/retail space.

• Variable

• Discretionary

• Unexpected

• Fixed