GCSE

Question 1

Advertising

Answer 1

A method of communicating information about the product; the business pays
for advertising time/space.

Question 2

Aim

Answer 2

The intention to reach a goal.

Question 3

Air pollution

Answer 3

The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment.

Question 4

Average rate of return

Answer 4

The average profit for the year as a percentage of the original investment. Average rate or return = average return per annum / initial  100

Question 5

Boston matrix

Answer 5

A tool for analysing the contribution made by each product in a business’ product portfolio. It plots each product’s position according to its market share and the rate of growth of the market.

Question 6

Brand image

Answer 6

The consumers’ perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns.

Question 7

Break-even chart

Answer 7

A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.

Question 8

Break-even output

Answer 8

The point at which the business’ total sales equals the total costs. There is neither profit nor loss.

Question 9

Business plan

Answer 9

A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.

Question 10

Cash

Answer 10

Money that the business has in cash or at the bank.

Question 11

Cash flow forecast

Answer 11

A financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity.

Question 12

Cash inflow

Answer 12

Money received by the business from its operations or investments

Question 13

Cash outflow

Answer 13

Money paid out by the business to fund its operations or investment activities.

Question 14

Centralisation

Answer 14

Maintaining control by keeping authority at the senior levels of the organisation.

Question 15

Chain of command

Answer 15

The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.

Question 16

Channels of distribution

Answer 16

The route the ownership of the product transfers from the seller to the buyer; it may be a single transaction or pass through others such as wholesalers, distributors, agents and retailers.

Question 17

Closing balance

Answer 17

The amount that remains in the account at the end of an accounting period.

Question 18

Commission

Answer 18

An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary.

Question 19

Competition

Answer 19

The rivalry between businesses looking to sell their goods/services in the same market.

Question 20

Competitive pricing

Answer 20

Setting the price of a product so that it is in line with competitors’ prices.

Question 21

Consumer law

Answer 21

Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly.

Question 22

Consumer spending

Answer 22

The money spent by households on goods and services to satisfy their needs and wants.

Question 23

Contracts of employment

Answer 23

A legal document that sets out the terms and conditions of the job for the employer and the employee.

Question 24

Cost

Answer 24

The money spent by a business on goods and services.

Question 25

Cost-plus pricing

Answer 25

Setting the price of a good or service at an amount higher than the cost of producing it so that a profit is made.

Question 26

Customer

Answer 26

Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.

Question 27

Customer engagement

Answer 27

The relationship between the business and the customer that puts the customer’s requirements at the centre of the operation to build brand loyalty.

Question 28

Customer loyalty

Answer 28

The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.

Question 29

Customer satisfaction

Answer 29

Whether customers are pleased with the goods/services they receive; whether they would purchase again.

Question 30

Decentralisation

Answer 30

Where authority is spread widely through the organisation.

Question 31

Delayering

Answer 31

The reorganisation of the organisation’s employees so that there are fewer levels of management.

Question 32

Delegation

Answer 32

Allocating a task to someone who would not normally be responsible for it.

Question 33

Demand

Answer 33

The quantity of a particular product that will be bought at particular price over a specific time.

Question 34

Directors

Answer 34

The people who are elected by the shareholders to run the business on their behalf.

Question 35

Diseconomies of scale

Answer 35

When a business grows too large, leading to a possible increase in unit cost.

Question 36

Disposal of waste

Answer 36

The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.