End Of Year Revision

Question 1

Limited liability

Answer 1

When the business owners personal possessions are safe as loss is limited

Question 2

Sole trader

Answer 2

A sole trader is someone who sets up in business on his or her own.

Question 3

Unlimited liability

Answer 3

Unlimited liability means that the personal possessions of the owners of a business are at risk if there are any problems. There is no limit to the amount of money the owners may have to pay out.

Question 4

Stakeholders

Answer 4

Stakeholders are individuals and organisations that are affected by, and affect, the activities of a business.

Question 5

Shareholder

Answer 5

A shareholder is a person or an organisation that owns part of a company. Each shareholder owns a ‘share’ of the business.

Question 6

Lean production

Answer 6

Lean production is an approach to production that aims to minimise waste.

Question 7

Total costs

Answer 7

Total costs are fixed costs plus variable costs.

Question 8

Deed of partnership

Answer 8

an agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave.

Question 9

A flotation

Answer 9

occurs when a private limited company (ltd) becomes a public limited company (plc) and has its shares listed on the Stock Exchange.

Question 10

Customer

Answer 10

someone who buys a product from a business.

Question 11

Consumer

Answer 11

someone who uses goods and services produced by businesses.

Question 12

Interest rates

Answer 12

refer to the cost of borrowing money or the reward for saving money, expressed as a percentage.

Question 13

Gross Domestic Product (GDP)

Answer 13

measures all the income earned in a country’s economy in a year.

Question 14

Company

Answer 14

a business that has its own legal identity. It can own items, owe money, sue and be sued.

Question 15

Private sector organisations

Answer 15

are owned by individuals

Question 16

Public sector organisations

Answer 16

are owned by the government.

Question 17

Dividends

Answer 17

the financial rewards paid out to shareholders each year.

Question 18

Negotiation

Answer 18

occurs when two sides discuss what they want and try to reach a solution.

Question 19

franchisor

Answer 19

sells a franchise usually in return for a fee and percentage of turnover.

Question 20

franchisee

Answer 20

buys a franchise usually in return for a fee and percentage of turnover.

Question 21

E-commerce

Answer 21

the act of buying or selling a product using an electronic system such as the internet.

Question 22

Outsourcing

Answer 22

occurs when a business uses another business to produce for it.

Question 23

merger

Answer 23

occurs when two or more businesses join together to form a new business

Question 24

takeover

Answer 24

occurs when one business buys control of another one.

Question 25

Economies of scale

Answer 25

occur when a business’s unit costs of production fall as its output rises and the business expands.

Question 26

Diseconomies of scale

Answer 26

when the cost per unit increases as a business expands.

Question 27

M-commerce

Answer 27

is the buying and selling of products through wireless handheld devices such as smartphone

Question 28

Ethics

Answer 28

refers to whether a business decision is thought to be morally right or wrong. An ethical decision is made on the basis of what is judged to be morally right.

Question 29

Non-renewable resources

Answer 29

those of which only a limited amount exists such as coal and oil.

Question 30

pressure group

Answer 30

a group of people with a common interest who influence public opinion and decisions by businesses and governments.

Question 31

Environmental responsibility

Answer 31

refers to the taking of decisions by businesses, consumers, governments and other groups with the intention of protecting the environment.

Question 32

Sustainability

Answer 32

refers to methods of production which can be continued in the long term without damage to the environment.