1.1 Definitions

Question 1

Resources

Answer 1

Resources are the inputs that businesses use to provide thier goods or services

Question 2

Enterprise

Answer 2

An enterprise is another
word for a business. It
also refers to the skills
of the people involved in
the business to identify
business opportunities and
bring together resources to
meet these opportunities.

Question 3

Interest

Answer 3

Interest is the money
paid by banks as a reward
to attract people to save
with them

Question 4

Advertising

Answer 4

A method of communicating information about the product. The business pays for advertising/space

Question 5

Aim

Answer 5

The intention to reach a goal

Question 6

Air pollution

Answer 6

The presence or introduction of harmful substances into the air causing disease,
allergies or damage to humans, animals, plants or the built environment.

Question 7

Asset

Answer 7

Something the business owns

Question 8

Boston matrix

Answer 8

A tool for analysing the contribution made by each product in a business’
product portfolio. It plots each product’s position according to its market share
and the rate of growth of the market.

Question 9

Brand image

Answer 9

The consumers’ perception of the brand; its character, qualities and
shortcomings. It is developed over time and operates as a consistent theme
through advertising campaigns.

Question 10

Break even chart

Answer 10

A diagrammatic representation of the costs and revenue for a product; it plots
total costs against total sales revenue, showing the break-even point where they cross

Question 11

Break even output

Answer 11

The point at which a business tatal sales equals the total costs there is neither profit nor loss

Question 12

Buffer stock

Answer 12

A stock of raw materials held in reserve to protect the production process from
unforeseen shortages.

Question 13

Business plan

Answer 13

A detailed statement of how the business intends to operate, either at start-up
or during a given period of time. Business plans are based on forecasts and so
cover only a short time.

Question 14

Cash

Answer 14

Money that a business has

Question 15

Cash flow forecast

Answer 15

A financial planning tool that estimates the money coming into and going out of
the business on a month-by-month basis; it allows the business to predict times
when additional finance may be needed to maintain liquidity.

Question 16

Channels of distribution

Answer 16

The route the ownership of the product transfers from the seller to the buyer; it
may be a single transaction or pass through others such as wholesalers,
distributors, agents and retailers.

Question 17

Closing balance

Answer 17

The amount that remains in the account at the end of an accounting period.

Question 18

Commission

Answer 18

An amount of money paid to an employee that is based on a percentage of the
sales he/she achieved; paid in addition to a basic salary.