Business

Question 1

Why should businesses mantain customer loyalty?

Answer 1

-To develop the business
-Customers will come back often
-To spread the word about the company (To market it)
-To act as a focus group (To know what they want from the business)

Question 2

How businesses mantain customer loyalty?

Answer 2

Create programs for customers, so that they will come back

Question 3

Meaning of statement of financial position

Answer 3

An accouting statement that records an overview of a business’s financial position at a given point in time.

Question 4

Meaning of assets

Answer 4

Resources that are owned by a business

Question 5

Meaning of liabilities

Answer 5

Debts owed by the business

Question 6

Meaning of non-current assets

Answer 6

Resources that are owned for the business to be used for more than one year

Question 7

Meaning of current assets

Answer 7

Resources that the business owns for less than a year

Question 8

Meaning of current liabilities

Answer 8

Debts that needs to pay in under a year

Question 9

Meaning of non-current liabilities

Answer 9

Debts that can be paid for more than a year

Question 10

What does the statement of financial position shows?

Answer 10

-the assets the business owes
-what the business is owed
-what the business owed
-how the business finances its activities

Question 11

What does the financial statements shows?

Answer 11

-to identify its strengths and weaknesses, to know if policies and strategies needs to be changed
-show if the business has met its objectives
-improve future business performance

Question 12

What is the meaning of economies of scale?

Answer 12

The reduction in average costs as a result of increasing the scale of operations

Question 13

What are the types of economies of scales are there?

Answer 13

-Financial
-Managerial
-Marketing
-Purchasing
-Technical

Question 14

What is the meaning of fixed costs?

Answer 14

Costs that do not change with output

Question 15

What is the meaning of variable costs?

Answer 15

Costs that change in direct proportion to output

Question 16

What is the meaning of total costs?

Answer 16

All the variable and fixed costs of producing the total output

Question 17

What is the meaning of diseconomies of scale?

Answer 17

Factors that cause average costs to rise as the scale of operations increases

Question 18

What causes disceconomies of scale?

Answer 18

-Poor communication
-Lack of commitment from employees
-Weak coordination
-Business that has become too large to handle

Question 19

What is the meaning of break-even?

Answer 19

A business which is not making a profit or a loss

Question 20

What is the concept of break-even?

Answer 20

-To calculate how many units it needs to sell before it starts to make a profit
-To calculate the effect on profit of increasing or decreasing the price of a product

Question 21

What are the benefits of a break-even chart?

Answer 21

-Easy to construct and interpret
-Provide businesses with useful information
-Can show the effect of a decision to change costs or revenues
-Helps with important business decisions such as the location and relocation of a business

Question 22

What are the limitations of a break-even chart?

Answer 22

-Assuming that all costs and revenues can be represented by straight lines
-It is not easy to separate costs into fixed variables

Question 23

What is the meaning of quality?

Answer 23

Ensuring a good or service that meets the needs and requirements of its consumers

Question 24

What is the meaning of quality standards?

Answer 24

The minimum standard of production or service acceptable to consumers

Question 25

Why is quality important to businesses?

Answer 25

-To develop a strong brand image -To keep customers and attract new customers -To reduce costs, customer complaints and returns -Charge a premium price -Encourage wholesalers and retailers to stock the product -Lengthen product life cycles

Question 26

What is the meaning of quality control?

Answer 26

Checking the quality of goods through inspection

Question 27

What is the meaning of quality assurance?

Answer 27

A system of setting agreed standards for every staghe of production

Question 28

What are the benefits of quality assurance?

Answer 28

-To encourage teamwork -To act as a motivator for employees -To reduce cost of wastage and faulty products -To know that resources are of the required standard before they enter the production process

Question 29

What are the problems with quality control by inspection?

Answer 29

May be repetitive and boring for the inspector

Question 30

What is the meaning of globalisation?

Answer 30

The increase in the flow of goods, services, capital, people, and ideas across international boundaries

Question 31

What are the disadvantages of globalisation?

Answer 31

-Higher unemployment -Increased competition -Environmental damage -Destruction of local cultures -Higher expenses

Question 32

What is the meaning of "Return on capital employed"?

Answer 32

A financial ratio that measures a company's profitability in terms of all of its capital.

Question 33

What is the meaning of a recession?

Answer 33

A recession is a significant, widespread, and prolonged downturn in economic activity. / Economice downturn

Question 34

What is the meaning of liquidity?

Answer 34

Liquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price

Question 35

Meaning of acid test ratio?

Answer 35

Uses data from a firm's balance sheet to indicate whether it has the means to cover its short-term

Question 36

Meaning of current ratio?

Answer 36

Measures a company’s ability to pay short-term obligations or those due within one year.

Question 37

What are the advantages of globalisation?

Answer 37

-New markets -Cheaper labor -More choices -Higher efficiency -Lower prices for products -Multiculturalism -Increased investments