Mathematical Literacy Term 1

Account

A record of income and expenditure.

Balance

This is the difference between debits and credits.

Bank statement

The details of all the transactions made from one bank account in a given time period.

Break-even point

Break-even point is where the business is at an activity level (doing business) at which total cost = total sales, i.e. you have made enough income to cover the costs. At the break-even point, you are making neither a profit nor a loss; from that point on you will be making a profit with each sale (until new costs are incurred).

Consumption rate

The rate at which a commodity, such as water, electricity or fuel, is consumed.

Cost-effective

Best value for money.

Cost price

This is the amount that it costs per unit to either manufacture or purchase an item or to prepare for a service that will be delivered. This amount is pure cost, no mark-up or profit has been added yet.

Cost rate

The price of a product per mass, volume, length or time unit.

Credit

This is an entry in an account that shows a payment made into the account.

Credit balance

The amount in the account is your own.

Credit card

A credit card is a service bank product that allows you to buy goods and pay for them at the end of the month.

Credit limit

The maximum amount you can spend on your credit card.

Debit

When someone or an organisation takes money out of your account. An entry in an account showing a payment made from an account.

Debit balance

The amount owed to a lender or seller.

Debit order

It is an arrangement whereby you give permission to a third party to withdraw money from bank account on a regular basis.

Deposit

A payment made into a bank account.

Disposable income

Income that is left over after all payments have been made.

Expenditure

An amount of money that is spent on something.

Fixed deposit

A single deposit invested for a fixed period at a fixed interest rate.

Fixed expenses

These are amounts that must be paid every month and which stay the same, like rent, school fees and transport costs.

Fund

A source of money.

Gross income

The total amount of all an individual’s income before deductions.

Invoice

A comprehensive document that details all the work done or items sold, and what costs are due.

Loan

A loan is an agreed sum of money that is lent by a bank or moneylender (e.g. personal loan or home loan).

Luxury item or service

An item or service that is not essential for daily life, but which makes life easier or more convenient.

Net pay

The amount an employee “takes home” after income tax has been deducted.

Overdraft

An overdraft is an arrangement you make with the bank that allows you to draw more money than there is in your account.

PAYE

(abbr.) Pay as you earn: tax taken off your earnings by your employer and sent to the South African Revenue Service before you are paid (the balance).

Remittance slip

A piece of paper that accompanies a payment and contains the most important details of the transaction.

Salary

An amount of money paid for the work you do. (This is normally paid monthly.)

Selling price

This is the price at which something is offered for sale.

Statement

A summary of transactions (debits and credits, or payments and receipts) made on an account.

Tariff

The rate charged for a service rendered, e.g. import duties, water consumption cost, etc.

Tax

A compulsory levy imposed on citizen’s earnings or purchases to fund the activities of government.

Taxable

A service, purchase or item or earning that has tax applied to it.

Tax invoice

Printed record of what was bought, what it cost, what was taxable, the tax amount, method of payment, amount tendered, and change due, if any.

Trillion

One-million-million (one followed by twelve zeros).

UIF

(abbr.) Unemployment Insurance Fund: A government-run insurance fund which employers and employees contribute to, so that when employees are retrenched they can collect some earnings (a portion).

Variable expenses

Expenses that change over time or from one week/month to the next. These are things that you usually pay or buy each month, but the amount changes e.g. telephone and electricity costs.

VAT

Value Added Tax (VAT) is a tax that is levied at 14% (currently in South Africa) on most goods and services, as well as on the importation of goods and services into South Africa.

VAT exclusive price

The price before VAT is added.

VAT inclusive price

The price after VAT is added.

Wages

A wage is an amount of money paid to an employee normally based on a fixed number of hours worked per week.

Withdrawal

Money taken out of a bank account.

Zero rated VAT items

These are goods that are exempt from VAT. Groceries that are basic foodstuffs are zero-rated in South Africa, e.g. brown bread, milk, mielie meal, samp, rice, etc..