Entrepreneurship/Financial Literacy Flashcards
What are the properties of a informal business?
Is not taxed
Not controlled by the government
Wages usually very low, often paid in cash
Not included in country’s GNP
What are the properties of a formal business?
Registered for tax with SA Revenue Service
Usually opens for regular working hours
Pays salaries/wages to employees
Usually have premises from which they operate
What are the 3 different types of businesses?
Manufacturing Business - They make goods
Trading Business - They sell already made goods
Service Business - They offer a service
What is 1 Advantage and Disadvantage of a formal business?
Advantage - Can attract better workers
Disadvantage - Cost of registration is high
What is 1 Advantage and Disadvantage of an informal business?
Advantage - Easy to start
Disadvantage - Workers work long hours
What is the responsibility businesses have as producers?
Producers have a responsibility to offer good quality products at the best possible price
What are 3 effects Natural Disasters have on a business?
Damage to infrastructure can make businesses inaccessible
Physical structure of the business could be damaged
Operating equipment maybe destroyed
What is the capital?
The capital is money and possessions used to start a business
What are assets?
Assets are possessions and can be fixed or current
What are liabilities?
Liabilities are debts that can be repaid over a long or short period
What are expenses?
Expenses are all the costs that have to be paid to live, and to run a home/business
What is profit?
Profit is when the income is more than the expenses
What is a loss?
Loss is when the expense is more than the income
What are your savings?
Savings are all your left over money which you can use or add up to buy something you really want
