Nature of Business

Question 1

What is a business ?

Answer 1

A business is any form of commercial activity to satisfy the economic wants of people.

Question 2

What is the basic needs of an human being ?

Answer 2

1.Food
2.Clothing
3.Shelter

Question 3

What is bartering ?

Answer 3

Barter is the exchange of one thing for another without the use of money.

Question 4

What are disadvantages of barter ?

Answer 4

1.Divisibility of goods
2.Storage life (Shelf life)
3.Rate of exchange
4.Double coincidence of wants

Question 5

What are the advantages of barter ?

Answer 5

1.Get rid of your surplus
2.To be able to exchange something to get something else in return

Question 6

Why are man refer to as economic animals ?

Answer 6

Man can be describe as economic animals because man (female and male) has to work to earn a wage or salary and that income is then used to provide the needs and wants of human being.

Question 7

What solved the barter system ?

Answer 7

Money

Question 8

What is money ?

Answer 8

Money is any object that is generally accepted as payment for goods and services in a given country.

Question 9

What are the seven characteristics of money ?

Answer 9

1. Durable
   2.Acceptable
   3.Exchangeable
   4.Scarce
   5.Portable
   6.Divisible
   7.Homogenous (Standard appearance)

Question 10

What are the 4 Functions of money ?

Answer 10

1.A medium of exchange
2.A measure of value
3.A store of value
4.A standard for postponed payment

Question 11

What is a credit card ?

Answer 11

A credit card is a card that allows you to borrow money up to certain limit

Question 12

What is a debit card ?

Answer 12

A debit card is a card where the bank allows you to access your money from your accounts.

Question 13

What is economic activity ?

Answer 13

Economic activity are activities that we engaged in to satisfy our basic needs and wants.

Question 14

What is Direct production ?

Answer 14

Direct production is a situation where a person or group of individuals produces what they need without relying on someone.

Question 15

What is the bill of exchange ?

Answer 15

A written order used usually in trading which binds one party to pay a fixed sum of money to another party on demanded or predetermine date.

Question 16

What is documentary credit ?

Answer 16

(The Letters of credit/Documentary credit solve some of the difficulties that occur in international trade and is one of the most secure method in this context)

Documentary credit is a method payment where the buyers’ bank guarantees payment to the seller with conditions that the seller has to fulfil.

Question 17

What is Electronic fund transfers ?

Answer 17

This is the electronic exchange of money without any paper money changing hands.

Question 18

What is standing order ?

Answer 18

Standing order is an instruction given to a bank by an account holder to make regular fixed payments to person/organization.

Question 19

What is Direct debit ?

Answer 19

Direct debit is where an account holder allows someone to withdraw money from their account at regular intervals.

Question 20

What is Direct deposits ?

Answer 20

Direct deposits is way employers deposits the wages of employees straight in their bank account via EFT.

Question 21

What is E-commerce ?

Answer 21

E-commerce refers to buying and selling goods and services via the internet.

Question 22

What is telebanking ?

Answer 22

Telebanking is a service that allows customers to conduct banking via the telephone.

Question 23

What is cheques ?

Answer 23

Cheques a paper that a bank holder fills out instructing the bank to do something with the money in their account.

Question 24

What is money order ?

Answer 24

A money order is a printed ,safe form of payment where an account holder can pay a specified sum to someone.

Question 25

What is bank drafts ?

Answer 25

Bank drafts is form of cheques drawn by a bank on its own funds.

Question 26

What is telegraphic money transfers ?

Answer 26

Telegraphic money transfers is sending money typically to an oversea destination for someone.

Question 27

What is internet banking?

Answer 27

Internet banking is a method of banking in which transactions are conducted electronically via internet.

Question 28

What is m-money ?

Answer 28

(Sometimes referred to as mobile wallet ,m-money)

M-money is an app running on a mobile device that lets users store, send and receive money.(Instead of using cash ,or traditional plastic cards, the user can pay safely using their mobile phones.)

Question 29

What is a producer ?

Answer 29

Someone who creates goods and services used by individuals and businesses

Question 30

What is a consumer ?

Answer 30

Is someone who purchases and uses goods and services for their personal use.

Question 31

What is an organization ?

Answer 31

Is an organized group of people with a particular purpose

Question 32

What is trade ?

Answer 32

The action of buying and selling goods and services.

Question 33

What is commodity ?

Answer 33

A raw material or agricultural product that can be bought and sold.

Question 34

What is speacialisation ?

Answer 34

Is the process of concentrating and becoming an expert in a particular field.

Question 35

What is market ?

Answer 35

Any situation that brings together the buyer and seller of goods and services.

Question 36

What is exchange ?

Answer 36

The act of giving one thing and receiving another in return.

Question 37

What is labour ?

Answer 37

Human metal of physical effort of any kind to produce goods of services.

Question 38

What is capital ?

Answer 38

Money or any other assets of value that are owned by the business.

Question 39

The role of a business in the community ?

Answer 39

1.They create job opportunities

2.They get more money circulating in the local economy

3.Encourage Entrepreneurship

4.They build community identity