Podcast
Questions and Answers
Which statement accurately describes an Income and Expense Statement?
Which statement accurately describes an Income and Expense Statement?
- It is a snapshot of your financial situation at a specific point in time.
- It shows a breakdown of your income and expenses over a period of time. (correct)
- It only includes earned income, not unearned income.
- It is used to calculate net worth, not net income.
What types of income are included in an Income and Expense Statement?
What types of income are included in an Income and Expense Statement?
- Only unearned income.
- Earned income and unearned income. (correct)
- Only earned income.
- Only gross income.
What are fixed expenses?
What are fixed expenses?
- Expenses necessary for life.
- Expenses that vary in amount each month.
- Expenses that stay the same amount each month. (correct)
- Expenses made at your discretion.
Which two categories can expenses be divided into?
Which two categories can expenses be divided into?
What is the formula for calculating net income?
What is the formula for calculating net income?
What does a negative net income indicate?
What does a negative net income indicate?
What are some ways to keep track of expenses?
What are some ways to keep track of expenses?
Flashcards
Income and Expense Statement
Income and Expense Statement
Shows a breakdown of your income and expenses over a period of time.
Types of Income
Types of Income
Earned income (e.g., wages) and unearned income (e.g., investments).
Fixed Expenses
Fixed Expenses
Expenses that remain constant each month.
Expense Categories
Expense Categories
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Net Income Formula
Net Income Formula
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Negative Net Income
Negative Net Income
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Tracking Expenses
Tracking Expenses
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Study Notes
Income and Expense Statement
- Accurately described as a financial statement that summarizes revenues and expenses over a particular period of time.
Types of Income
- Include all income earned from various sources, such as wages, salaries, tips, commissions, and any other form of earnings.
Fixed Expenses
- Are expenses that remain the same amount every month, such as rent, mortgage payments, and insurance premiums.
Categorizing Expenses
- Divided into two categories: fixed expenses and variable expenses.
- Fixed expenses remain the same amount every month, while variable expenses change from month to month.
Calculating Net Income
- Formula: Net Income = Total Revenue - Total Expenses.
Negative Net Income
- Indicates that Total Expenses exceed Total Revenue, resulting in a financial loss.
Tracking Expenses
- Ways to keep track of expenses include: recording every purchase, keeping receipts, using a budgeting app, and setting up a ledger or spreadsheet.
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