BEA - Business

Question 1

Four factors of production:

Answer 1

Land
Labor
Capital
Entrepreneurship

Question 2

Triple bottom line:

Answer 2

3Ps
People
Profit
Planet

Question 3

Corporate social responsibility

Answer 3

CSR
Going beyond the minimum legal requirements
Decision making that considers benefits and costs not just shareholders
How business impacts a wilder world and aspire to impact positively
Ethically
Contribute to economic development and improve the quality of life for workers and their whanau.

Question 4

private limited company
Adv
Dis

Answer 4

Advantages
-Limited liability
-Separate legal identity
-Continuity in the event of the death of shareholder
-Ease of buying and selling of shares (encourages investment

Disadvantages
-Legal formalities in setting up company
-Legal requirements. More rules and regulations. This includes the -publication of accounts and the need to have them audited.
-Directors objectives vs shareholders objectives

Question 5

Who owns Limited Company?

Answer 5

Shareholders.
Each shareholder has a share in the company.

Question 6

Objective of business

Answer 6

Survival
Profit satisficing
Profit maximisation
Growth

Question 7

Public Limited Company (PLC)

Answer 7

A company whose shares are traded publicly on the stock exchange.

Question 8

What are benefits of going from Partnership to Limited Company

Answer 8

Limited liability, (protecting personal assets from business debts)
Easy access to capital through the sale of shares.

Question 9

Private Limited Company (Ltd)

Answer 9

A company owned by shareholders with limited liability. Shares are not publicly traded.

Question 10

Sole Trader

Answer 10

A business owned and operated by one person.

Question 11

What is the main difference between a sole trader and a partnership?

Answer 11

A sole trader is owned by one person, while a partnership is owned by two or more people.

Question 12

Why might someone choose to form a private limited company instead of remaining a sole trader?

Answer 12

To benefit from limited liability, protecting personal assets from business debts.

Question 13

Explain the concept of limited liability

Answer 13

Limited liability means owners are only responsible for business debts up to their investment, protecting personal assets.

Question 14

Assets

Answer 14

They are the resources owned by a business
Eg cash, equipment, inventory, and accounts receivable.

Question 15

Liabilities

Answer 15

Liabilities are obligations that a business owes
Eg loans, accounts payable, and mortgages.

Question 16

Equity

Answer 16

Eg owner’s capital, retained earnings, and common stock.
Equity increased by owner investments and net income,
decreased by withdrawals and net losses.

Question 17

Revenues

Answer 17

Income earned by the business

Eg sales of goods or services. sales revenue, service revenue, and interest income.

Question 18

Expenses

Answer 18

Costs incurred by a business in the process of earning revenue.
They are the outflow of assets or incurrence of liabilities.

Question 19

A: Assets
Exp: Expenses
D: Drawings (also known as Owner’s Withdrawals)
L: Liabilities
I: Income (also known as Revenue)
OE: Owner’s Equity (also known as Equity)