Businesses

Question 1

What are the characteristics of a developing country?

Answer 1

Little industrialization
Low standard of living
Low average income
Large percentage (70%) of people work for themselves or in small businesses

Question 2

What is another name for developing countries?

Answer 2

Third World Countries

Question 3

What are the characteristics of a developed country?

Answer 3

Advanced industrialization and technology
High standard of living
High average income
Large percentage of people work in big businesses

Question 4

Describe the different places in which informal and formal businesses are located.

Answer 4

Informal - city centre, suburbs, roads

Formal - fixed location, shop or office

Question 5

Describe the differences in ownership between informal and formal businesses.

Answer 5

Informal - individual entrepreneur

Formal - Multiple owners

Question 6

Describe the differences in management between informal and formal businesses.

Answer 6

Informal - owner, family members

Formal - Employees

Question 7

Describe the differences in types of goods and services between informal and formal businesses.

Answer 7

Informal
Sell to poor people
Small quantities
Low markup

Formal
Variety

Question 8

Describe the differences in target market between informal and formal businesses.

Answer 8

Informal - poor people

Formal - Salary earners

Question 9

Describe the differences in problems and challenges between informal and formal businesses.

Answer 9

Informal
No proper accounting
Competition
Small profit

Formal
Keep record of transactions

Question 10

Describe the differences in regulations between informal and formal businesses.

Answer 10

Informal businesses are largely unregulated

Formal businesses require trading licences and are subject to industry-specific regulations

Question 11

List the three categories of business, based on how they earn their money.

Answer 11

Manufacturing
Trading
Service

Question 12

What are accounting records?

Answer 12

books or records that are used by a business to keep track of all transactions and business deals

Question 13

What is tax?

Answer 13

A payment charged by the government to pay for the provision of goods and services to the public.
A noose around your neck.

Question 14

What is a wholesaler?

Answer 14

A business that buys goods in large quantities from manufacturers and sells them to shops or customers in smaller quantities.

Question 15

What are municipal rates?

Answer 15

Taxes or levies charged by towns or cities to pay for services like rubbish removal.
A noose around your neck

Question 16

What is VAT?

Answer 16

A tax paid when you buy goods and services

Question 17

What is a VAT vendor?

Answer 17

A business which charges its customers VAT and pays the VAT over to the government.

Question 18

What is a mico-enterprise?

Answer 18

a very small informal business employing less than five people

Question 19

What is a small business?

Answer 19

A business that employs 5 to 50 people

Question 20

What is an enterprise?

Answer 20

Another name for a business

Question 21

What is a medium-sized business?

Answer 21

A business that employs 50 to 200 people

Question 22

What is a large business

Answer 22

A business that employs more than 200 people

Question 23

What are shares?

Answer 23

Equal parts of a business that can be bought by the public

Question 24

What does SMME mean?

Answer 24

Small, medium and micro-enterprises

Question 25

What is a spaza shop?

Answer 25

Small informal shop in a township, often run from a house or a container

Question 26

What is a shebeen?

Answer 26

An unlicensed or unregulated seller of alcohol, often in a private home