Assessment of Skills and Knowledge(ASK) in Fundamental Business Concepts Practice Test

Which source of income should be included in personal budget planning?

1. Investment dividends

2. Salary

3. Gift money

4. Loans

The correct answer is: Salary

In personal budget planning, salary is a critical source of income because it represents consistent and predictable cash flow from employment. It is typically received on a regular basis, such as weekly or monthly, making it a reliable figure that individuals can incorporate into their budgets for necessary expenses, savings, and discretionary spending. Salary forms the foundation of most individuals' financial plans, allowing for better forecasting of future financial needs and obligations. Other sources of income, such as investment dividends, can be variable and not guaranteed, making them less reliable for structured budget planning. Gift money and loans also fall into categories that are not consistent or dependable; gifts are unpredictable and may not be expected on a regular basis, while loans often represent debt that must be repaid. Therefore, including salary in budget planning reflects a more stable and manageable approach to financial organization.