8-9 Income Vs Expense

Front

Car Insurance premium

Back

Fixed Expense

Answer explanation

Car Insurance is a fixed expense because we have to pay the same amount every year for a fixed period.

Front

NetFlix Subscription: Fixed Expense or Variable Expense?

Back

Fixed Expense

Answer explanation

Netflix subscription is a fixed expense. This is because the same subscription fees is paid every month from our bank account.

Front

Meals at restaurants

Back

Discretionary Expenses

Answer explanation

Having meals at restaurant is a discretionary expenses because you could have had the meal at your home but you choose to go for luxury of eating at restaurant. This is more expensive and not necessary.

Front

Rent paid for the house that you are living in

Back

Fixed Expense

Answer explanation

Rent for the house that you are living in is a fixed expense because you have to pay the same rent every month for a long period of time without change in rental amount.

Front

You download 3 songs from iTunes.

Back

expense

Answer explanation

When you download a song from iTunes, you pay them some amount and that is an expense.

Front

You received tuition fees for taking classes of 2 junior students

Back

Income

Answer explanation

When you are receiving tuition fees, it means you took tuition classes. So you used your skills to make money. This money received by you is an income for you.

Front

Expenses that happen each month and are about the same amount.

Back

Fixed Expenses

Answer explanation

Since the expense happens every month and it does not change, as the amount is same, it is a fixed expense.

Front

An expense that keeps on changing and is not the same every month is called:

Back

variable expense

Answer explanation

Since the expense is not the same every month, it keeps changing. Changing means variable. In some months this expense will be low and in some months it would be high. It is even possible that in someone's the expenses almost zero. This is a variable expense.

Front

This expense is not a necessity. I can live without this expense.

Back

Discretionary expense

Answer explanation

Since I can live without this expense and it is not necessary, this means it is a luxury to incur that expense. Any expense that is done for the luxury and not necessity is a discretionary expense.

Front

Saving Money is very important as this is the first step towards financial freedom.

Back

True

Answer explanation

Saving is the first step of growing our money