P2 - Definitions
Capital Income: This is the net worth of a business. It’s the amount in which assets exceed liabilities. It’s the income that comes from capital, which means it’s coming directly from the government itself, rather than any specific production or direct work. Capital income includes stock dividends or any sort of capital gains, as well as income an owner gets from a business they own.
Sole traders: If you’re self-employed then it means you work for yourself, and not for an employer. A sole-trader is a self-employed person and they are the sole owner of their business.
Partners: Partners are people who have shares within businesses. This means they don’t solely own the business; it could be split by 2 or more people, starting with a 50% share for 2 people and so on.
Shares: If someone has a share within a business, it means that they have a unit of ownership within a corporation or financial asset. However, owning shares of a business doesn’t generally mean that they have direct control over said business on a day to day basis, but they are entitled to an equal distribution of any profits if any end up being declared in the form of dividends.
Loans: A loan is something that is borrowed, generally money. This means people borrow a sum of money (often a large sum of money) and they’re expected to pay it back, with interest.
Mortgages: A mortgage is a legal agreement between somewhere like a bank or building society, and they lend money in agreement that they can take a little of the debtor’s property. However, this agreement becomes void once said debtor has paid back their mortgage.
Revenue Income:
Sales (Cash and credit transactions): Sales revenue or turnover is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, revenue is referred to as