Mid Term Exam Flashcards
5 Forms of Business
Sole trader
Partnership
Companies
Franchise
Cooperative
Type of economical system
Free market
Mixed economic
Planned economic
Who is an entrepreneur
A person who is willing to take the risk setting up their own business enterprise
Enterprise
A business that provides goods or services in exchange for money
Reasons for establishing a business
Increase income
Financial independence
Increase control in working life
Function of a entrepreneur
Planning
organizing
Accessing funds
What is collateral
Collateral is something valuable that you give to a lender as a guarantee when you borrow money
Types of collateral
Stocks
Property
Money
Moto vehicle
What is a contract
A contract is a legally binding agreement between two or more people enforced by law
Two types of contract
Simple and specialty contract
Simple contract
A agreement between two parties, which can be done verbally, written or done in an action
Specialty Contract
A deed or a contract under seal. It requires signing sealing and delivering
Method of discharge
By performance
By breach of a contract
By mutual agreement
Types of business documents
Delivery note
Credit note
Debit note
Purchasing order
How can a business grow internally
When a company uses its own tools and resources to expand.
Launching new products
How can a business grow externally
When two or more businesses join together as one business
Factors of production
Land -natural resources
Labor -human resources
Capital -man made resources
Enterprise/ entrepreneur
What is barter
The exchange of goods or services without the use of money
Characteristics of money
Acceptability
Durability
Portability
Functions of money
Medium of exchange
Store of value
Unit of account
Employer
A person who hires and pays employees
Three types of stakeholders
Consumers
Employees
Government
What is profit
Profit is the money left over after all expenses have been paid
Employee
A person who works for a employer
What is a stake holder
A person who has interest or concern in a business
What is feasibility study
Is an analysis to determine whether a proposed project is possible and makes sense to pursue
Characteristics of a good leader
Flexibility
Honesty
Focus
Truth worthiness
Leadership styles
Democratic leaders
Autocratic leaders
Problems faced by a entrepreneur
Financing
Lack of planning
Making decisions
How does entrepreneur contribute to the country
Creating new business
Developing new products
What is a business plan
A formal written document setting out the objectives of a business
Importances of feasibility studies
Reduce risks
Increase the chance of success
What is production
Production is the process of manufacturing goods and products from raw materials or components
What is marketing
the process of promoting and selling products or services to customers.
Characteristics of cottage industry
Homes based
Use local raw materials
Use family member as labour
What is a multinational company
a company that has business operations in at least one country other than its home country
Function of management
Planning
Organizing
Controlling
Directing
Motivating
Characteristics of an entrepreneur
Creative
Flexible
What is insurance
An agreement between an insurance company that gives you financial protection from losses that can occur during normal business operations
Principles of insurance
Pooling of risks
Indemnity
Utmost good faith
Contribution
Two types of insurance
Life insurance
Non life insurance
What is productivity
Productivity is a measure of how efficiently a business is using all its resources
Differentiate between production and productivity
Production is the act of creating or manufacturing something while Productivity is a measure of how efficiently a business is using all its resources
What are the three levels of production
Subsistence
Domestic
Surplus
What is market
A market is any situation made up of a group of individuals who interact in the process of buying and sell goods and services
What is entrepreneurship
The skill in starting a new business especially when this involves seeing new opportunities
