 Income is the payment you receive for selling goods, your time, providing services, or investing your money.


 An expense is the money you spend to buy in goods and services provided by someone else, for example school fees, groceries, and so on.


 A business makes a profit if its income is more than its expenses.


 A business makes a loss if its expenses are more than its income.


 Budget is a plan of how much money a business or individual will have and how to spend it.


 Savings is money that is left over after all the expenses have been paid.


 A bank or financial institution is where individuals and businesses can keeps their money safe.


 A transaction is any action (buying or selling) where money is involved.


 Financial records are evidence that a transaction has taken place.


Financial literacy Unit 2 Income and expenses  Personal income is the total amount of money that you get from different sources, for example salaries, wages, commission, rent and so on.


 Personal expenses are the amounts of money paid to satisfy our needs and wants.


 Statement of net worth – a statement that describes a financial situation of a person or business, as it is at a certain moment.


 Business receive income from providing services or selling goods.


 Business have various expenses, such as cost of sales, operating expenses, interest paid on a loan, and so on.


 Businesses put money in a savings account if they need to keep it aside and make it grow for a specific purpose. This is called short-term savings.


 Medium-term investments are also called fixed deposits. A business can invest money in a fixed deposit for longer periods than a savings account to earn more interest.


144 Examination preparation


Financial literacy Unit 3 Budgets  A budget is a plan of how much money you have and how you will spend it. We can define it as an estimate of future income and expenses.


 Income is the money you get from earning a salary. A business gets income from selling goods and services. Expenditure is what we pay out for goods and services that we need.


 A personal budget is drawn up by individuals and households. A business budget is drawn up by businesses to help them plan and control income and expenditure.


Revision of Term 3


Entrepreneurship Unit 1 The entrepreneur  An entrepreneur is someone who recognises a need in the community and starts a business to meet that need.


 Entrepreneurships have special characteristics and skills: they are innovative, creative, organised, trustworthy, resourceful, hardworking, good at planning and are willing to take risks and make decisions.


 Entrepreneurs buy, sell or produce to make a profit. They buy goods and resell them at a higher price or they produce things to sell.


Entrepreneurship Unit 2 Starting a business  The needs and wants of consumers influence the development of a business.


 A SWOT analysis is used to analyse the strengths, weaknesses, opportunities and threats of a new or existing business as part of changing or growing that business.


 Businesses and individuals set goals to define purpose, structure and financial performance.


 Advertising lets consumers know about available products. Various media are used to advertise products, such as posters, packaging, newspapers and magazines.


 Responsible businesses recycle material. This can be a business in itself.


 Variable costs are costs directly linked to making the product and fixed costs are the


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