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AS Level Business Studies > Module 1 > Flashcards

Module 1 Flashcards

1
Q

What is Mission

A

An organization’s aims or long-term intentions.

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2
Q

What is Mission statement

A

A qualitative statement of an organization’s aims that use language intended to motivate employees and convinced customers suppliers and those outside the firm of its sincerity and commitment.

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3
Q

What is Business objectives.

A

Goals that must be achieved in order to realize the stated aims of an organization, department or individual team.

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4
Q

What is Corporate objectives.

A

Goals of the whole organization rather than of different elements of the organization.

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5
Q

What is Functional objectives.

A

Goals of each of the functional areas of a business.

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6
Q

What is Strategy

A

The medium- to long- term plans through which an organization intends to achieve its objectives

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7
Q

What is Cash flow

A

The amount of money flowing into and out of a business over a period of time.

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8
Q

What is Price

A

The amount paid by a consumer to purchase one unit of a product

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9
Q

What is Total revenue

A

The income received from an organization’s activities

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10
Q

What is Fixed costs

A

Costs that do not vary directly with output in the short run

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11
Q

What is Variable costs

A

Costs that vary directly with output in the short run

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12
Q

What is Total costs

A

The sum of fixed costs and variable costs

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13
Q

What is 3 examples of fixed costs

A

Machinery, Rent and Marketing

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14
Q

What is 3 examples of variable costs

A

Raw materials, direct labor, Power

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15
Q

What is Profit

A

The difference between the income of a business and its total costs

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16
Q

2 ways to increase profit

A

Increase sales revenue and decrease costs

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17
Q

What is Unincorporated business

A

There is no distinction in law between the individual owner and the business itself

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18
Q

What is Incorporated business

A

This has a legal identity that is separated from the individual owners

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19
Q

What is unlimited liability

A

A situation which the owners of a business are liable of all the debts that the business may incur

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20
Q

What is Limited liability

A

A situation in which the liability of the owners of a business is limited to the fully paid-up value of the share capital

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21
Q

What is Sole trader

A

A business owned by one person. The owner may operate on their own or may employ other people

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22
Q

What is Private limited company

A

A small - medium sized business that is usually run by the family or the small group of individuals who own it.

23
Q

What is Public limited company

A

A business with limited liability, share capital of over £50,000, at least two shareholders and two directors. Also anyone can buy shares on public stock exchange.

24
Q

3 advantages of sole traders

A

Easy and cheap to set up, few legal formalities, owner takes all the profit.

25
Q

3 disadvantage of sole traders

A

Unlimited liability, relies on owners skill, limited capital for investments

26
Q

3 advantages of Private Limited companies (LTD)

A

Limited liability, access to more capital than unincorporated businesses, more flexible than a plc.

27
Q

3 disadvantages of Private limited companies (LTD)

A

Shares are difficult to sell as they can’t be sold on stock exchange, difficult to raise finance, many more legal formalities

28
Q

3 advantages for Public limited companies (PLC)

A

Limited liability, can gain positive publicity as a result of trading on stock exchange, suppliers more willing to give trade credit.

29
Q

3 disadvantages for Public limited companies (PLC)

A

Must publish financial information, significant administrative expenses, susceptible to hostile takeovers.

30
Q

What is Ordinary share capital

A

Money given to a company by shareholders in return for a share certificate that gives them part ownership of the company

31
Q

What is Dividend

A

A payment made by a company to its shareholders out of profit earned.

32
Q

What is Market capitalisation

A

The value of outstanding shares in a PLC.

33
Q

What is Outstanding shares

A

Total of all ordinary shares issued and fully paid up

34
Q

What is Shareholder

A

The owner of a limited company that owns at least one share in said company

35
Q

What is Share price

A

The price of a single share in a company

36
Q

What is Mutual societies

A

They exist to provide mutual benefits for their members

37
Q

What is Charity

A

A charity is a non-profit organization with exclusively donate profit to people who need it.

38
Q

Examples of Political factors

A

government economic and social polices, extent of government intervention

39
Q

Examples of economic factors

A

business cycle. income level, levels of inflation and unemployment

40
Q

Examples of social factors

A

demographic factors, ethical issues, changing lifestyle

41
Q

Examples of technological factors

A

new products and processes, impact and costs of change

42
Q

Examples of legal factors

A

legislation

43
Q

Examples of environmental factors

A

Environmental issues and fair trade

44
Q

What is demand

A

The amount of a product that customers are willing and able to buy at any given price over a time period

45
Q

What is Market conditions

A

The relative attractiveness of the external market in which a business operates

46
Q

What is Interest rates

A

The costs of borrowing money and the return for lending money

47
Q

What is Demographic factors

A

they are related to changes in the characteristics of the population of a country.

48
Q

2 Examples of demographic factors

A

Aging population, Ethnically diverse population

49
Q

What is advantages to owning a business

A

Make a lot of profit, be their own boss, allows you to pursue a job that is interesting

50
Q

What are some aims for businesses

A

offer high quality goods and services, customer service, develop new products, invest in local community

51
Q

What does the acronym SMART mean

A

Specific, Measurable, Attainable, Realistic, Timely

52
Q

4 types of objectives

A

Profit objectives, Growth objectives, Survival objectives, Cash flow objectives

53
Q

Why is profit important

A

Can motivate people, good source of finance, attract investors

AS Level Business Studies (7 decks)

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