1

Question 1

Above-the-line promotions

Answer 1

marketing communications
using mass advertising media.

Question 2

Accountant

Answer 2

a person who specializes in keeping and
inspecting financial records and preparing financial
statements.

Question 3

Accounting year

Answer 3

the 12-month period for which a
business prepares its income statement.

Question 4

Accounts receivable

Answer 4

a balance sheet term for debtors. It is the total amount of money owed to the business by customers who have purchased items on credit terms payable within the next 12 months.

Question 5

Accounts payable

Answer 5

a balance sheet term for creditors. It is the total amount of money owed by the business to suppliers who have sold items on credit terms that it must repay within the next 12 months.

Question 6

Acid test ratio

Answer 6

current assets less inventories expressed as a ratio of current liabilities.

Question 7

Ancillary firms

Answer 7

firms that supply business support services to other organizations, such as transportation, marketing and equipment maintenance services.

Question 8

Appreciation

Answer 8

a rise in the value or market price of a national currency against another currency or currencies.

Question 9

Arbitration

Answer 9

a process involving the judgement of an independent person or body to help resolve industrial disputes between workers and employers.

Question 10

Autocratic leadership

Answer 10

telling employees what to do without consultation.

Question 11

Average cost

Answer 11

the cost of producing each unit of output.

Question 12

Balance of payments

Answer 12

a record of all the financial transactions between a country and all the other countries with which it trades.

Question 13

Balance sheet

Answer 13

a statement recording the value of assets, liabilities and capital of a business on a given date.

Question 14

Bankruptcy

Answer 14

a term used for a business that is declared
in law as unable to pay its debt.

Question 15

Batch production

Answer 15

production of a limited number of identical products to meet a specific requirement or customer order. Each new batch may be slightly different from the last one produced.

Question 16

Below-the-line promotions

Answer 16

marketing promotions that do not use mass media.

Question 17

Brand name

Answer 17

a name used to identify and distinguish specific goods, services or businesses from others.

Question 18

Centralized organization

Answer 18

an organization in which authority, responsibility and decision-making is concentrated at the top of the chain of command.

Question 19

Chain of command

Answer 19

the line of management authority in a hierarchical organization.

Question 20

Collateral

Answer 20

assets of value that a customer can offer as
security against a loan.

Question 21

Competition

Answer 21

rivalry between businesses trying to win consumers’ acceptance, sales and loyalty.

Question 22

Computer-aided design (CAD)

Answer 22

the use of computer
systems to create, modify and optimize the design of
a product.

Question 23

Computer-aided manufacturing (CAM)

Answer 23

the use of computers to control and monitor the use of machinery and equipment in a manufacturing process.

Question 24

Cost of sales

Answer 24

the cost of the items sold,

Question 25

Debt finance

Answer 25

repayable long-term loans.

Question 26

Default –

Answer 26

– failure to repay debt finance.

Question 27

Depreciation

Answer 27

fall in the value or market price of a national currency against another currency or currencies.

Question 28

Diversification

Answer 28

strategy that involves
producing a variety

Question 29

Direct costs

Answer 29

costs that can be attributed to a specific
activity or the production of a particular product.

Question 30

Diseconomies of scale

Answer 30

rising average costs due to a business being too big to operate efficiently.

Question 31

Disposable income

Answer 31

personal income that is available
to spend or save

Question 31

Disposable income

Answer 31

personal income that is available
to spend or save

Question 32

Distributed profit

Answer 32

profit after tax paid out to the business
owners

Question 33

Downsizing

Answer 33

reducing the size of the workforce in an
organization.

Question 34

E-commerce

Answer 34

promoting, buying and selling goods and
services using electronic systems

Question 35

Economic boom

Answer 35

business activity, output and prices increase rapidly.

Question 36

Economic growth

Answer 36

– an increase in the total output or
GDP of a national economy.

Question 37

Economies of scale

Answer 37

a fall in the average cost of producing