Definitons

Question 1

Quality control

Answer 1

A system for the inspecting the quality of the goods or services produced and ensuring that they are of the required standards.

Question 2

Face to face

Answer 2

Involves direct contact between buyer and seller, for example, a sale completed in a shop

Question 3

Telesales

Answer 3

Sales completed over the telephone

Question 4

E-commerce

Answer 4

The bringing together of buying and selling electronically

Question 5

Consumer law

Answer 5

The area of law which protects the stumpers of a business, mainly through the Consumer Rights Act of 2015

Question 6

Supply chain

Answer 6

The chain of business involved in the production of a product and it’s delivery to the user.

Question 7

Trade credit

Answer 7

When the business buys goods to sell and does not need to pay the supplier for a period of time - Often 30 days.

Question 8

Overdraft

Answer 8

An arrangement with a bank that a business can spend more money then it has in its account.

Question 9

Owners’ capital

Answer 9

Money from the savings put into the business by the owner(s).

Question 10

Retained profit

Answer 10

Profit that is not distributed to shareholders as dividend

Question 11

Crowdfunding

Answer 11

Money raised through an appeal to the public who are supported of the business.

Question 12

Loan

Answer 12

A sum of money borrowed for a stated period at an agreed rate of interest.

Question 13

External finance

Answer 13

Finance raised from sources outside the business. The main external sources of finance are overdraft, trade credit, loan, crowd fund ain’t and share issue.

Question 14

Internal finance

Answer 14

Finance raised from within the business. The main internal sources of finance are owners’ capital, retained profit and sales of assets.

Question 15

Fixed costs

Answer 15

Costs that stay the same regardless of a change in output, for example, rent for offices, shops, factories or land and the uniform business tax which is a tax based on the location of the business.

Question 16

Variable costs

Answer 16

Costs that change as output changes, for example, wage and material costs will increase if more products are made or sold.

Question 17

Costs of sales

Answer 17

The cost to the business of production goods to sell, for example, buying materials and employing workers to make a product.

Question 18

Expenses

Answer 18

The costs of operating the business, including wages and salaries, rent, or mortgage payments, insurance, heating and lighting and advertising.

Question 19

Average rate of return (ARR)

Answer 19

A method of measuring and comparing the profitability of and investment over the life time of the investment.

Question 20

Break-even quantity

Answer 20

The amount a business must sell to earn enough revenue to just cover its costs so it does not make a profit or a loss.

Question 21

Forescast

Answer 21

A prediction. The forecast break-even output of a business is a prediction.

Question 22

Liquidity

Answer 22

The ability of a business to pay its short-term debts.