Junior Cert ‘06

BUSINESS STUDIES

Revision Notes

Income, Expenditure and

Household Budgets

Name:______Class:______

THIS BOOKLET SHOULD BE PLACED IN YOUR PORTFOLIO AFTER ITS USE IN CLASS IS FINISHED

Mr Foster

Section One:

INCOME

Contents

I Income

II Benefit in Kind

III Savings

IV The Payslip

I Income

______

______

______

Example:

Income can be received as money or ______.

II Benefit in Kind

______

______

______

Example:

III Savings

______

______

______

Interest

______

______

III The Payslip

A.  The total wages earned by an employee is ______

B.  A person’s gross income is the full amount before ______have been made. ______income is the final income or take home pay

C.  Employers are obliged to give every employee a ______showing details of their pay.

D.  Income based on the number of hours worked multiplied by the hourly rate is called a ______. A salary is the annual income paid every ______.

E.  Most people receive their pay in cash or by ______. You may also have it paid directly into your ______. This is called paypath.

F.  Complete the following choosing the right words from:

net income; pay slip; wage

(i) A ______gives details of gross earnings, deductions and payment due.

(ii) A______is calculated by multiplying hours worked by the hourly rate

(iii)______is calculated by subtracting deductions from Gross

Income

G.  Take home pay equals total wages less deductions. An example of a deduction is: (encircle the right answer)

Social insurance; council bin charges; life assurance; motor tax.

H.  Statutory deductions Voluntary deductions

1.______1.______

2.______2.______

I.  PRSI is ______.

Benefits of PRSI

1______

2______

3______

4______

J.  PAYE is ______

Services paid for by our PAYE

1______

2______

3______

4______

5______


Section Two:

Expenditure

I. What is Expenditure

II. Categories of Expenditure

III. Documents we use when we spend money

IV. How to Calculate your Electricity Bill

V. Budgeting

I. What is Expenditure

______

______

______

Examples:

(A) Fixed Expenditure

______

______

______

Example:

(B) Irregular Expenditure

______

______

Example:

(C) Discretionary Expenditure

______

______

______

Example:

II. Categories of Expenditure

Categories of Expenditure

III. Documents we meet when we spend money

1. Receipts

______

______

______

Example:

2. Delivery Note

______

______

______

Example:

3. Invoice

______

______

______

Example:

IV How to Calculate your Electricity Bill

We buy electricity from the E.S.B

E.S.B.= ______

They send us a bill every 2 months.

There are 3 parts to the Electricity Bill

Steps in Calculating the Electricity Bill

Step 1: Find units used = ______-______

Step 2: Multiply units used x______

Step 3: Add the S______C______

Step 4: Now find the V______A______T______

Step 5: Add VAT to your answer from Step 3.


Practice Questions

1. Standing Charge: €12.70

Previous: 1200

Present: 1570

VAT 10%

From the above information, calculate the amount due in payment of the electricity bill

2. Standing Charge: €15

Previous: 1330

Present: 1630

VAT 10%

From the above information, calculate the amount due in payment of the electricity bill

3. Standing Charge: €11.70

Previous: 1500

Present: 2300

VAT 10%

From the above information, calculate the amount due in payment of the electricity bill

4. Standing Charge: €14.70

Previous: 1440

Present: 1690

VAT 10%

From the above information, calculate the amount due in payment of the electricity bill

V. Budgeting

______

______

______

Example:

(i) Impulse Buying

______

______

______

Example:

(ii) Opportunity Cost

______

______

______

Example:

(iii) False Economies

______

______

______

Example:

Section Three:

HOUSEHOLD BUDGETS

Net Cash:

______

______

______

Example:

Opening Cash

______

______

______

Example:

Closing Cash:

______

______

______

Example:

Surplus

______

______

Deficit

______

______
The last two lines of a household budget…………..

Practice Questions

1. Prepare a household budget for the Dowd family from the following data:

Income:

·  Mr Dowd earns €1000 per month

·  Mrs Dowd earns €900 per month

·  Child Benefit is €120 per month

Expenditure:

·  Mortgage is €300 per month

·  Insurance is €100, payable in April

·  School fees are €90 in January and €150 in March

·  Electricity bills are €100 in February and €80 in April

·  Car Tax of €250 and car insurance of €550 are paid in March

·  Life Assurance is €120 per month

·  Household Expenses are €400 per month

·  Entertainment is €40 per month

·  Diesel costs €40 per month

Planned Income / Jan / Feb / Mar / Apr / Total
Less Expenditure
Net Cash
Opening Cash / 100
Closing Cash

2. Prepare a household budget for the Smith family from the following data:

Income:

·  Mr Smith earns €2000 per month

·  Mrs Smith earns €1000per month

·  Child Benefit is €150 per month

Expenditure:

·  Mortgage is €750 per month

·  Insurance is €150, payable in February

·  Electricity bills are €75 in February and €180 in April

·  Car Tax of €250 is paid in April

·  Car insurance of €550 is paid in March

·  Life Assurance is €100 per month

·  Household Expenses are €450 per month

·  Entertainment is €60 per month

The opening cash on 1st January was €150

Planned Income / Jan / Feb / Mar / Apr / Total
Less Expenditure
Net Cash
Opening Cash
Closing Cash

3. Prepare a household budget for the McGrath family from the following data:

Income:

·  Mr McGrath earns €1500 per month

·  Mrs McGrath earns €1900 per month

·  Child Benefit is €200 per month

Expenditure:

·  Mortgage is €850 per month

·  Insurance is €150, payable in March

·  Electricity bills are €175 in February and €210 in April

·  Car Tax of €300 and car insurance of €600 are paid in February

·  Childcare costs €240 per month

·  Household Expenses are €500 per month

·  Entertainment is €100 per month

The opening cash on 01 January was €200

Planned Income / Jan / Feb / Mar / Apr / Total
Less Expenditure
Net Cash
Opening Cash
Closing Cash


4. Prepare a household budget for the Keaney family from the following data:

Income:

·  Mr Keaney earns €1250 per month

·  Mrs Keaney earns €1400 per month

·  Child Benefit is €250 per month

Expenditure:

·  Mortgage is €600 per month

·  Insurance is €175, payable in March

·  Electricity bills are €200 in February and €180 in April

·  Car Tax of €225 is paid in February

·  Car insurance of €550 are paid in April

·  Telephone is €50 per month

·  Household Expenses are €400 per month

·  Entertainment is €50 per month

·  Broadband costs €30 per month

The opening cash was €225

Planned Income / Jan / Feb / Mar / Apr / Total
Less Expenditure
Net Cash
Opening Cash
Closing Cash