MOCK PAPER REVISION (3 MARK QUESTIONS)

Question 1

List 3 ways a business can add value to the good or service it offers?

Answer 1

• Function.
• Cost.
• Appearance.

Question 2

What is Liability? (DEFINITION)

Answer 2

A company’s financial debt or obligations that arise during the course of its business operations.

Question 3

How would a business get rid of Liability?

Answer 3

By selling their personal belongings in order to pay off debt.

Question 4

What is the definition of a Stakeholder?

Answer 4

A Group of People Who Have an Impact on a Business and are Involved in Making Decisions.

Question 5

Name 1 benefit of a bank loan?

Answer 5

You’re then able to spend money on promotion.

Question 6

Name 1 Drawback of a bank loan?

Answer 6

Taking money out will cost a lot more to put back in with added interest.

Question 7

Name 2 short term Internal Source of Finance?

Answer 7

• Retained Profit.

- Changing Stock Levels.

Question 8

Name 2 Medium Term Internal Source of Finance?

Answer 8

• Owners Funds.

- Sale of Assets.

Question 9

Name 1 Long Term Internal Sources of Finance?

Answer 9

-Selling Assets.

Question 10

Name 2 Short Term External Sources of Finance?

Answer 10

• Bank Overdraft.

- Bank Loan.

Question 11

Name 2 Medium Term External Sources of Finance?

Answer 11

• Government Grant.

- Venture Capital.

Question 12

Name 2 Long Term External Sources of Finance?

Answer 12

• Share Capital.

- Mortgage.

Question 13

What does a Market Map show?

Answer 13

A market map shows the different competitors in the same category as you and where in the market you’d be placed.

Question 14

What is Market Segmentation?

Answer 14

Market Segmentation is ‘Dividing the market into subgroups/similar categories.’

Question 15

Give 2 examples of Fixed Costs?

Answer 15

• A mortgage.

- Council Tax.

Question 16

Give 2 examples of Variable Costs?

Answer 16

• Postage Invoice.

- Sales Commission.