EMS Flashcards
1
Q
Goods
A
You can see, feel and touch
2
Q
Services
A
Actions performed
3
Q
Name two types of Goods
A
Free Goods
Economic Goods
4
Q
Free goods
A
Freely available, not scares, provided by nature
5
Q
Economic good
A
Produced by business, to be paid for
6
Q
Name 3 Categories of Economic Goods
A
Cunsumer goods
Capital Goods
Semi-Finished Goods
7
Q
Consumer goods
A
Directly involved in satisfying consumers wants & needs
8
Q
Name two classes of Consumer good
A
Durable Goods
Non- Durable Goods
9
Q
Durable good
A
Lasts for a long period
10
Q
Non-durable goods
A
Lasts for a short period
11
Q
Capital goods
A
Good that are used to produce other goods & services
12
Q
Semi-finished good
A
Good used to manufacture other goods
13
Q
Primary Sector
A
Rural Areas
1st layer of economy
Raw materials
Farming
Fishing
Forestry
Mining
Hunting & gathering
Uses Natural resources directly
14
Q
Secondary Sector
A
Outside of town
2nd layer of economy
Use raw materials
Factories
Ship building yards
Aeroplane construction
Building, engineering
Use raw materials to manufacture goods
15
Q
Tertiary Sector
A
In town
3rd layer of economy
Offer product from secondary
Provide services
Schools
Hospitals
Banks
Law firms
16
Q
Consumers
A
Buy goods & services from Producers
17
Q
Producers
A
Produces goods & services for consumers
18
Q
3 Different sectors of economy where producers participates
A
Primary Sector
Secondary Sector
Tertiary Sector
19
Q
The role of household in the economic cycle as Consumers
A
They are consumers, buying goods & services to satisfy their needs & wants
Must Satisfy basic needs by buying food shelter and clothing - then luxury
Offer entrepreneurial abilities
20
Q
The role of household in the economic cycle as Producers
A
Supply Labour
Key resource in producing process
Producing goods & services for their own use
21
Q
Efficiently
A
getting best results from what is available with the least possible waste in time & materials
22
Q
Effectively
A
choosing the best option to get what you need at the best price at the right time
23
Q
What to consider in order to utilize goods and services efficiently & effectively
A
Healthy environment has balance between consumption of Natural resources and Production
Perfect balance is replacing natural resources as they are used
Focus on creating more goods & services and using less natural resources
Cleaner Production methods & technologies create opportunities for small business “green jobs”
24
Q
Recycling
A
Used or waste materials into new products
25
Reuse
Using products again in order to expand the life
26
Reduce
Reducing how much we use of something
27
Capital
Money used to start a business
Buildings, machinery, computers, transport
28
Name the 5 types of Capital
Fixed/Physical Capital
Financial Capital
Share Capital
Working/Operating Capital
Start-up Capital
29
Fixed/Physical Capital
Good used to produce other goods to satisfy wants & needs
Includes Machines, tools, factory buildings, office buildings and trucks
30
Financial Capital
Source of money or funds
Usually borrowings
31
Share Capital
Money invested by owners used to buy fixed capital
32
Working/Operating Capital
Is need to run the business day to day
Does not include fixed goods
33
Start-up Capital
The money needed to start the business
34
Assets
Anything of value the business own
Land & buildings, vehicles, furniture, equipment, money in the bank, cash float, debtors (people owing the business money)
35
Name two types of Assets
Non-current
Current
36
Non-Current Asset
Asset that will not be converted into cash within the next year
Includes: Land, buildings, vehicles, equipment, investments
37
Current Asset
Will be converted into cash within the next year
Includes: Inventory (stock), debtors (people how owe you money)
38
Liabilities
Items owed by the business
Long term liabilities, long term borrowings
Current liabilities (shorter than a year)
Creditors, Bank Overdraft, Loans
39
Name two types of Liabilities
Non-Current
Current
40
Non-current Liability
Long-term cost you will pay back for longer than a year
Includes: Mortgage loan
41
Current Liability
Debt that must be paid within a year
Includes: Creditor, bank overdraft
42
Bank overdraft
A loan from the bank where the bank allows you to draw more money than you have in the bank
43
Income
Money received by a business from its operating activities
Services rendered, sales of goods
44
Expenses
Money used by the business from operating activities
Water & electricity, licences, wages, stationery
45
Fixed Expenses
Costs you have to pay every month
Also known as overheads
Include: Rent, telephone, water & electricity, salaries, wages
46
Variable expenses
Relate to the amount of goods & services provided
Increase if more goods & services are produced
Includes: raw materials, wages, completed products, advertising, stationery & repairs fuel for deliveries
47
Profit
When income is more than expenses
48
Loss
When expenses are more than income
49
Show a profit
Made money
Income > expenses
50
Run at a loss
Lost Money
Income < expenses
51
Break even
Has not made or lost money
Income = Expenses
52
Budget
Written plan on how to spend future income
53
Savings
The act of putting money aside for future use
54
How can you save money
Never spend more than you earn
Think about buying what you need first
Always have cash to buy the basic things you need
Keep emergency funds
Learn from the past and plan for the future
Make long term goals
55
Banking
Keeping your money at a financial institute
Nedbank, ABSA, Standard Bank, Discovery Bank,
Capitec
56
Financial Report
Records of financial transactions
57
Why must amount, dates, sources of transactions be correctly recorded into an accounting system
To ensure the effective daily running of a business
To work out if a business has made a profit or loss
To plan for the future
To work out how much money is owed to other parties
58
Who are interested in Financial Statements
Owners of the business
Potential buyers of a business
SARS (South African Revenue Services)
Management and Senior personal
Staff and Trade unions
Creditors or suppliers who grant credit
Banks or Financial services
59
Book-keeping
Recording financial transactions in an orderly & systematic way
60
Transaction
A financial action or event that takes place in a business
61
The business sells goods for cash to a customer
Two parties: Business & customer
Business exchanges goods for cash
Customer exchanges cash for goods
62
The Business buys goods from supplier for cash
Two Parties: Business & Supplier
Business exchanges cash for goods
Supplier exchanges goods for cash
63
Two types of transaction can take place
Cash (receipts or payments)
Credit (Purchases)
64
Transactions are recorded in
Journals & Ledgers of the business (books)
65
What are necessary from the source document when recording the transaction in the books of the business
Date of the transaction
Parties involved in the transaction
Amount of money involved
Reason for the transaction
66
What services are offered by a bank
ATM's
Internet Banking
Financial Advice
Small business support and advice
Foreign exchange
Credit & debit card facilities
EFT's
67
ATM's
Automated Teller Machine
68
Internet banking
Check balances, transfer money, pay accounts using the internet
69
Financial advice
Banks will advice you on how best to invest your money
70
Foreign exchange
Customers can buy foreign bank notes and transfer money to other countries
71
Credit card
A card that allows you to buy now & pay later
72
EFT's
Electronic
Fund
Transfer
73
Opening a savings account @ a bank
1. choosing the Bank to suite your needs
2. Most banks offer same services
3. Keep the following in mind
- Accessibility
- Services offered
- Customer services
- Interest rates
74
Personal income
Salary/Wage
Interest on Bank account
Rent received from property
Profits from business
75
Fixed income
Amounts that are received regularly
Salary or Wages
76
Variable income
Uncertain windfalls
Winning a competition
Receive money as a gift
77
Salary
Work Full-time, usually skilled
Received monthly
Same amount each month
eg Teachers, Office clerk, Business manager
78
Wages
Can work Full-time or Part-time, usually semi-skilled
Received weekly
Amount can change
eg domestic workers, labourers, casuals
79
Personal expenses
Individuals cost of spending
80
Personal expenses examples
Rent or accommodation costs
Water & electricity
Phone costs
Petrol & transport
Food
Clothing
School fees
Medical expenses
81
Net worth or personal worth
(TOTAL ASSETS) - (TOTAL LIABILITIES)
= NET WORTH
82
Types of income a business receives
Renting out extra offices
Earning interest on money invested
Selling goods or products
Providing services
Earning commission from selling eg houses
83
Profit or loss
Income > expenses
Expenses > income
84
Cost of sales
Costing
The cost involved in directly producing the goods or services that you actually sell
85
Gross profit
The total amount of profit made after deducting only the cost of sales from the income
86
Net Profit
The total amount of profit made after ALL expenses are deducted from the income
87
Savings
Putting money aside for things needed in future
eg staff training, deposit on new premises, replacing capital goods
88
Why saving is important
The more organisations & people save, the more money banks have available to lend to other businesses and people
This mean businesses can start up and expand
89
Business can use saved money in two different ways
One way is to buy fixed assets
(re-investing in the business)
Invest in a savings account (earning interest income)
90
Liquidity
How quickly an asset can be converted into cash
91
Liquid Capital
The capital that is available in cash
92
Liquidity of the business
The ability of the business to regularly pay their debt on time
93
Investment
When a business buys a financial product like a policy or investment plan or physical object like machine
The business gets some kind of financial return
94
Traditional society
* Provided for own needs
* Self-sufficient
* No trade, no money
* eg Hunters-gatherers
* lived on meat from wild
animals, food from plants
* called hunting and gathering
* used everything
* Limited range of goods &
services
* Basic methods to hunt &
harvest
* Lack of technology
* Subsistence economy
95
Modern Society
* Use coins, note, debit/credit
cards to pay for good &
services
* Use electronic bank - internet
* Industrialized Society
* People have special skills
96
Bartering
Exchange (goods or services) for other goods or services without using money
97
Advantages of bartering
Flexible - diff goods &services can be exchanged
Good are only produced to meet needs - no excess or waste
Economic power is not in the hands of the few rich people
Natural resources are only used to meet needs
98
Disadvantages of bartering
Not always practical
Difficult to find what you want & need
Difficult to carry/transport
No common measure of value
Good can't be divided into smaller units
No late payments allowed
Storing good difficult
Difficult to work out real value
99
Advantages of internet banking for buying products
247
Consumers & Producers need to be in same place
More choice in products & services
Faster communication & access to information
100
Disadvantages of internet banking for buying products
More information needed by online store
Personal information not always safe
Can not check the quality
No personalized customer service
Difficult to return faulty goods
101
Security features on a SA bank note
Watermark in paper
Security thread running through the paper
High quality paper
High quality ink
102
The role of money
A medium of exchange - buying goods and services
Unit of account - standard measure of how much goods are worth
Store of value - it hold it's value over time
103
Consumer Economy
Businesses encourage consumers to spend as much money as possible on goods & services
104
Effects of Consumer Economy
Consumers spend puts pressure on environment
Business use raw materials to produce goods
Sometimes these raw materials run out
We must concentrate on sustainable resources that can be regenerated
105
Money has 4 important characteristics that make it a sustainable medium of exchange
It is scare
It is durable
It is portable
It can be divided into smaller units
106
Socio-economic imbalance
A term used to describe a situation where people do not have equal access to resources
107
Inequality
Another word for imbalance
108
What is inequality
When some people have something other people do not have
108
Two kinds of Inequality
Inequality of Income
Inequality of Opportunity
109
Inequality of Income
Some people have large incomes, and other have small or no income
110
Inequality of Oppertunity
Some have opportunities that others don't have
111
What is poverty
We measure poverty by comparing income
If income is too low to meet basic needs (food, shelter, health, education) - Poor or living in poverty
112
The poverty line
Minimum income needed to meet a person's basic needs
113
Poverty Cycle
A circle of events that keep people poor
Economic decline
Low personal income
Lack of access to food & shelter
Hunger & poor Sanitation
Disease & poor health
Depleted workforce
114
Reasons for Difference in income
Sexism
Innate abilities
Racism
Nepotism
Personal preference
Education & training
115
Relationship between low levels of education and poverty
Low or no schooling = can't find employment
Schooling = will be paid more the better educated
116
Urban Area
Many people, densely populated
Cities
Well developed infrastructure
117
Socio- Economic challenges faced in Urban Areas
High cost of living
Pollution
Influx of people
Traffic congestion
118
Socio- Economic challenges faced in Rural Areas
Lack of infrastructure
Inadequate access to public services
Lack of employment opportunities
119
Stages of production
and explain them
Primary - Natural resources are taken from the earth
Secondary - Products are manufactured from the raw materials
Tertiary - Is done by businesses who provide a service rather than make goods
120
What is production
Process of taking raw materials & transforming it into useful goods & services
Material used in production are know as resources or factors of production
121
Inputs
The Factors of production
Raw materials and other resources used to make the product
122
4 Groups of factors of production
Land
Labour
Capital
Entrepreneurs
123
Outputs
The products that the business produces
124
Two kinds of outputs
Goods
Services
125
Goods
Physical products, tangible
126
Services
The thing the business does for people, non-tangible
