Business Studies Topic 1

Question 1

What is the role of a business

Answer 1

profit, employment, incomes, choice, innovation, entrepreneurship and risk, wealth and quality of life

Question 2

What are the ways to classify a business

Answer 2

Legal structure, size, industry sector and geographical spread

Question 3

What is geographical spread

Answer 3

Local, national and global

Question 4

What are the industry sectors

Answer 4

Primary, secondary, tertiary, quaternary and quinary

Question 5

What legal structures have limited liability

Answer 5

Private and public companies

Question 6

What legal structures have unlimited liability

Answer 6

Sole trader and partnership

Question 7

What legal structures are incorporated

Answer 7

Private and public companies

Question 8

What are the external influences on a business

Answer 8

Economic, financial, geographic, social, legal, political, institutional, technological, competitive situation and markets

Question 9

What are the different levels of government

Answer 9

Local, state and federal

Question 10

Different market concentrations are

Answer 10

Monopoly, oligopoly, perfect competition and monopolistic competition

Question 11

What are the internal influences on a business

Answer 11

Products, location, management, resources and business culture

Question 12

Who are stakeholders in a business

Answer 12

Managers, environment, customers, employees, owners and public

Question 13

What are the stages of the business life cycle

Answer 13

Establishment, growth, maturity and post maturity

Question 14

What are the three options for a business in the post maturity stage

Answer 14

Steady state, decline, renewal

Question 15

What are the main reasons for business failure

Answer 15

Failing sales and failing profits

Question 16

What is voluntary cessation

Answer 16

Voluntary cessation is when an owner retires, resigns or when the owner abandons the business.

Question 17

What is involuntary cessation

Answer 17

Involuntary cessation is when the owner is forced to close down the business. An example of involuntary cessation is bankruptcy.

Question 18

What is a creditor

Answer 18

A creditor is an individual or business that is owed money because they have provided a good or service or loaned money to another entity.

Question 19

Define bankruptcy

Answer 19

Bankruptcy is when a business doesn’t have the funds for their debts

Question 20

Define voluntary administration

Answer 20

Voluntary administration is where a person comes into a business to try and revive their debts and try to save them from bankruptcy.

Question 21

What is liquidation

Answer 21

Liquidation can be regarded as equivalent to bankruptcy. It results in the end of a business. A liquidator is appointed to sell all of the company’s assets to creditors and the rest of the money is paid to the owners of the business.