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Matthew Grade 7 > EMS > Flashcards

EMS Flashcards

1
Q

Goods

A

You can see, feel and touch

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2
Q

Services

A

Actions performed

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3
Q

Name two types of Goods

A

Free Goods
Economic Goods

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4
Q

Free goods

A

Freely available, not scares, provided by nature

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5
Q

Economic good

A

Produced by business, to be paid for

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6
Q

Name 3 Categories of Economic Goods

A

Cunsumer goods
Capital Goods
Semi-Finished Goods

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7
Q

Consumer goods

A

Directly involved in satisfying consumers wants & needs

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8
Q

Name two classes of Consumer good

A

Durable Goods
Non- Durable Goods

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9
Q

Durable good

A

Lasts for a long period

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10
Q

Non-durable goods

A

Lasts for a short period

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11
Q

Capital goods

A

Good that are used to produce other goods & services

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12
Q

Semi-finished good

A

Good used to manufacture other goods

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13
Q

Primary Sector

A

Rural Areas
1st layer of economy
Raw materials
Farming
Fishing
Forestry
Mining
Hunting & gathering
Uses Natural resources directly

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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

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15
Q

Tertiary Sector

A

In town
3rd layer of economy
Offer product from secondary
Provide services
Schools
Hospitals
Banks
Law firms

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16
Q

Consumers

A

Buy goods & services from Producers

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17
Q

Producers

A

Produces goods & services for consumers

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18
Q

3 Different sectors of economy where producers participates

A

Primary Sector
Secondary Sector
Tertiary Sector

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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

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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

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21
Q

Efficiently

A

getting best results from what is available with the least possible waste in time & materials

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22
Q

Effectively

A

choosing the best option to get what you need at the best price at the right time

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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”

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24
Q

Recycling

A

Used or waste materials into new products

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25
Q

Reuse

A

Using products again in order to expand the life

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26
Q

Reduce

A

Reducing how much we use of something

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27
Q

Capital

A

Money used to start a business
Buildings, machinery, computers, transport

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28
Q

Name the 5 types of Capital

A

Fixed/Physical Capital
Financial Capital
Share Capital
Working/Operating Capital
Start-up Capital

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29
Q

Fixed/Physical Capital

A

Good used to produce other goods to satisfy wants & needs
Includes Machines, tools, factory buildings, office buildings and trucks

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30
Q

Financial Capital

A

Source of money or funds
Usually borrowings

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31
Q

Share Capital

A

Money invested by owners used to buy fixed capital

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32
Q

Working/Operating Capital

A

Is need to run the business day to day
Does not include fixed goods

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33
Q

Start-up Capital

A

The money needed to start the business

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34
Q

Assets

A

Anything of value the business own
Land & buildings, vehicles, furniture, equipment, money in the bank, cash float, debtors (people owing the business money)

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35
Q

Name two types of Assets

A

Non-current
Current

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36
Q

Non-Current Asset

A

Asset that will not be converted into cash within the next year
Includes: Land, buildings, vehicles, equipment, investments

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37
Q

Current Asset

A

Will be converted into cash within the next year
Includes: Inventory (stock), debtors (people how owe you money)

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38
Q

Liabilities

A

Items owed by the business
Long term liabilities, long term borrowings
Current liabilities (shorter than a year)
Creditors, Bank Overdraft, Loans

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39
Q

Name two types of Liabilities

A

Non-Current
Current

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40
Q

Non-current Liability

A

Long-term cost you will pay back for longer than a year
Includes: Mortgage loan

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41
Q

Current Liability

A

Debt that must be paid within a year
Includes: Creditor, bank overdraft

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42
Q

Bank overdraft

A

A loan from the bank where the bank allows you to draw more money than you have in the bank

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43
Q

Income

A

Money received by a business from its operating activities
Services rendered, sales of goods

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44
Q

Expenses

A

Money used by the business from operating activities
Water & electricity, licences, wages, stationery

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45
Q

Fixed Expenses

A

Costs you have to pay every month
Also known as overheads
Include: Rent, telephone, water & electricity, salaries, wages

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46
Q

Variable expenses

A

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

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47
Q

Profit

A

When income is more than expenses

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48
Q

Loss

A

When expenses are more than income

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49
Q

Show a profit

A

Made money
Income > expenses

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50
Q

Run at a loss

A

Lost Money
Income < expenses

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51
Q

Break even

A

Has not made or lost money
Income = Expenses

52
Q

Budget

A

Written plan on how to spend future income

53
Q

Savings

A

The act of putting money aside for future use

54
Q

How can you save money

A

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
Q

Banking

A

Keeping your money at a financial institute
Nedbank, ABSA, Standard Bank, Discovery Bank,
Capitec

56
Q

Financial Report

A

Records of financial transactions

57
Q

Why must amount, dates, sources of transactions be correctly recorded into an accounting system

A

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
Q

Who are interested in Financial Statements

A

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
Q

Book-keeping

A

Recording financial transactions in an orderly & systematic way

60
Q

Transaction

A

A financial action or event that takes place in a business

61
Q

The business sells goods for cash to a customer

A

Two parties: Business & customer
Business exchanges goods for cash
Customer exchanges cash for goods

62
Q

The Business buys goods from supplier for cash

A

Two Parties: Business & Supplier
Business exchanges cash for goods
Supplier exchanges goods for cash

63
Q

Two types of transaction can take place

A

Cash (receipts or payments)
Credit (Purchases)

64
Q

Transactions are recorded in

A

Journals & Ledgers of the business (books)

65
Q

What are necessary from the source document when recording the transaction in the books of the business

A

Date of the transaction
Parties involved in the transaction
Amount of money involved
Reason for the transaction

66
Q

What services are offered by a bank

A

ATM’s
Internet Banking
Financial Advice
Small business support and advice
Foreign exchange
Credit & debit card facilities
EFT’s

67
Q

ATM’s

A

Automated Teller Machine

68
Q

Internet banking

A

Check balances, transfer money, pay accounts using the internet

69
Q

Financial advice

A

Banks will advice you on how best to invest your money

70
Q

Foreign exchange

A

Customers can buy foreign bank notes and transfer money to other countries

71
Q

Credit card

A

A card that allows you to buy now & pay later

72
Q

EFT’s

A

Electronic
Fund
Transfer

73
Q

Opening a savings account @ a bank

A
  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
Q

Personal income

A

Salary/Wage
Interest on Bank account
Rent received from property
Profits from business

75
Q

Fixed income

A

Amounts that are received regularly
Salary or Wages

76
Q

Variable income

A

Uncertain windfalls
Winning a competition
Receive money as a gift

77
Q

Salary

A

Work Full-time, usually skilled
Received monthly
Same amount each month
eg Teachers, Office clerk, Business manager

78
Q

Wages

A

Can work Full-time or Part-time, usually semi-skilled
Received weekly
Amount can change
eg domestic workers, labourers, casuals

79
Q

Personal expenses

A

Individuals cost of spending

80
Q

Personal expenses examples

A

Rent or accommodation costs
Water & electricity
Phone costs
Petrol & transport
Food
Clothing
School fees
Medical expenses

81
Q

Net worth or personal worth

A

(TOTAL ASSETS) - (TOTAL LIABILITIES)
= NET WORTH

82
Q

Types of income a business receives

A

Renting out extra offices
Earning interest on money invested
Selling goods or products
Providing services
Earning commission from selling eg houses

83
Q

Profit or loss

A

Income > expenses
Expenses > income

84
Q

Cost of sales

A

Costing
The cost involved in directly producing the goods or services that you actually sell

85
Q

Gross profit

A

The total amount of profit made after deducting only the cost of sales from the income

86
Q

Net Profit

A

The total amount of profit made after ALL expenses are deducted from the income

87
Q

Savings

A

Putting money aside for things needed in future
eg staff training, deposit on new premises, replacing capital goods

88
Q

Why saving is important

A

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
Q

Business can use saved money in two different ways

A

One way is to buy fixed assets
(re-investing in the business)
Invest in a savings account (earning interest income)

90
Q

Liquidity

A

How quickly an asset can be converted into cash

91
Q

Liquid Capital

A

The capital that is available in cash

92
Q

Liquidity of the business

A

The ability of the business to regularly pay their debt on time

93
Q

Investment

A

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
Q

Traditional society

A
  • 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
Q

Modern Society

A
  • Use coins, note, debit/credit
    cards to pay for good &
    services
  • Use electronic bank - internet
  • Industrialized Society
  • People have special skills
96
Q

Bartering

A

Exchange (goods or services) for other goods or services without using money

97
Q

Advantages of bartering

A

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
Q

Disadvantages of bartering

A

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
Q

Advantages of internet banking for buying products

A

247
Consumers & Producers need to be in same place
More choice in products & services
Faster communication & access to information

100
Q

Disadvantages of internet banking for buying products

A

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
Q

Security features on a SA bank note

A

Watermark in paper
Security thread running through the paper
High quality paper
High quality ink

102
Q

The role of money

A

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
Q

Consumer Economy

A

Businesses encourage consumers to spend as much money as possible on goods & services

104
Q

Effects of Consumer Economy

A

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
Q

Money has 4 important characteristics that make it a sustainable medium of exchange

A

It is scare
It is durable
It is portable
It can be divided into smaller units

106
Q

Socio-economic imbalance

A

A term used to describe a situation where people do not have equal access to resources

107
Q

Inequality

A

Another word for imbalance

108
Q

What is inequality

A

When some people have something other people do not have

108
Q

Two kinds of Inequality

A

Inequality of Income
Inequality of Opportunity

109
Q

Inequality of Income

A

Some people have large incomes, and other have small or no income

110
Q

Inequality of Oppertunity

A

Some have opportunities that others don’t have

111
Q

What is poverty

A

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
Q

The poverty line

A

Minimum income needed to meet a person’s basic needs

113
Q

Poverty Cycle

A

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
Q

Reasons for Difference in income

A

Sexism
Innate abilities
Racism
Nepotism
Personal preference
Education & training

115
Q

Relationship between low levels of education and poverty

A

Low or no schooling = can’t find employment
Schooling = will be paid more the better educated

116
Q

Urban Area

A

Many people, densely populated
Cities
Well developed infrastructure

117
Q

Socio- Economic challenges faced in Urban Areas

A

High cost of living
Pollution
Influx of people
Traffic congestion

118
Q

Socio- Economic challenges faced in Rural Areas

A

Lack of infrastructure
Inadequate access to public services
Lack of employment opportunities

119
Q

Stages of production
and explain them

A

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
Q

What is production

A

Process of taking raw materials & transforming it into useful goods & services
Material used in production are know as resources or factors of production

121
Q

Inputs

A

The Factors of production
Raw materials and other resources used to make the product

122
Q

4 Groups of factors of production

A

Land
Labour
Capital
Entrepreneurs

123
Q

Outputs

A

The products that the business produces

124
Q

Two kinds of outputs

A

Goods
Services

125
Q

Goods

A

Physical products, tangible

126
Q

Services

A

The thing the business does for people, non-tangible

Matthew Grade 7 (4 decks)

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