Revision for exam may 2024

Question 1

What is market share ?

Answer 1

Market share is the percentage of total sales a business has in its market

Question 2

What are the short term sources of finance ?

Answer 2

Owner’s savings
Trade credit
Hire purchase
Credit card
Overdraft

Question 3

What is an overdraft ?

Answer 3

It allows a business to withdraw funds from its accounts that are not there (interest included)

Question 4

What is trade credit ?

Answer 4

Suppliers allow the business to have the goods now and pay for them at a later date

Question 5

What is owner’s savings ?

Answer 5

Money (personal savings) invested by the owner of the business.

Question 6

What is hire purchase?

Answer 6

A deposit is paid and then the remaining amount for the asset is paid monthly instalments. (equipment and vehicles)

Question 7

What is a credit card ?

Answer 7

Allows a business to pay for goods by borrowing money from the credit card provider. (charged interest)

Question 8

What are the long terms sources of finance ?

Answer 8

Loan
Crowdfunding
Share issue
Venture Capitalist
Mortgage
owner’s savings
Retained profits

Question 9

What is loan ?

Answer 9

This is where an amount of money is borrowed for a set period with an agreed repayment schedule. (Interest charged)

Question 10

What is crowdfunding?

Answer 10

This is where the business ask for crowds to invest money to contribute towards the business. (does not need to repaid)

Question 11

What is share issue?

Answer 11

This is where businesses set up as a limited company to sell shares to raise finance.

Question 12

What is venture capitalist ?

Answer 12

This is when people invest in new business and ask for percentage of the business’s profit or ask for percentage of the business’s stake in return.

Question 13

What is a mortgage ?

Answer 13

Is any loan secured on a property. (interest charged)

Question 13

What does SWOT stand for ?

Answer 13

Strengths, Weaknesses, Opportunities, Threats

Question 14

What are the 5 economic factors ?

Answer 14

Inflation
Interest rate
Taxation
Unemployment
Exchange rates

Question 15

What is private sector ?

Answer 15

Is businesses that are owned by individuals E.G Tesco

Question 16

What is public sector ?

Answer 16

These are businesses that are owned by the government E.G NHS

Question 17

What is a third sector ?

Answer 17

These are businesses that are run for the social benefit E.G charities

Question 18

What is span of control ?

Answer 18

The number of employees an employee or manager is responsible for

Question 19

What is authority ?

Answer 19

The power which comes with a job role. E.G the right to give orders

Question 20

What is delegation ?

Answer 20

The passing down of authority to do a task to an employee of lower rank

Question 21

What is empowerment ?

Answer 21

Allowing employees to make their own decisions.

Question 22

What is the calculation for break even ?

Answer 22

Fixed costs/ (selling price per unit- variable cost per unit)

Question 23

what is primary activity ?

Answer 23

a business whose main goal is to extract raw materials

Question 24

what is secondary activity ?

Answer 24

a business involved in manufacturing products

Question 25

what is tertiary activity ?

Answer 25

a business that provides a service.

Question 26

what is a sole trader ?

Answer 26

a business that only has one owner

Question 27

what is a partnership ?

Answer 27

a business with two or more owners

Question 28

what is a private limited company ? (ltd)

Answer 28

a business owned by one or more shareholders

Question 29

advantages to a ltd .

Answer 29

. can raise funds by selling shares . can control who shares are sold to and easier to maintain control .shareholders closely involved . separate legal entity . range of skills and expertise . limited liability

Question 30

disadvantages to a ltd .

Answer 30

. complex legal/ administrative requirements . dividends need to be paid to be shareholders . financial accounts not kept private

Question 31

what is a public limited company ? (plc)

Answer 31

a business owned by two or more shareholders

Question 32

advantages to a plc .

Answer 32

. wide range of skills and expertise . can raise large amounts of finance . limited liability . business continuity

Question 33

disadvantages to a plc .

Answer 33

. risk of takeover . financial accounts must be published . dividends need to be paid to shareholders . very complex legal/ administrative requirements

Question 34

Examples of businesses aims and objectives.

Answer 34

survival being enterprising growth reputation financial

Question 35

financial aims .

Answer 35

to break even to increase revenue to reduce costs to make profit

Question 36

types of growth

Answer 36

physically/ organically - opening a new shop, employing more staff securing more sales inorganically - takeover or merge

Question 37

what are the key activities of finance.

Answer 37

financial control record keeping

Question 38

what are the functional areas?

Answer 38

finance marketing operations human resources business support services customer service

Question 39

what are the organisational structures ?

Answer 39

flat tall matrix centralised decentralised

Question 40

advantages of a flat structure

Answer 40

short chain of command communication is fast improved feedback for decision makers

Question 41

disadvantages of a flat structure

Answer 41

wide span of control time-consuming role for managers as lots of employees to manage

Question 42

advantages of a tall structure

Answer 42

narrow span of control tighter control

Question 43

disadvantages of a tall structure

Answer 43

long chain of command poor communication slow decision making number of managers required

Question 44

advantages to a centralised structure

Answer 44

decisions made by expert decision makers decisions made tend to unify the business

Question 45

disadvantages to a centralised structure

Answer 45

lower ranked workers may feel unimportant decisions made by high status employees

Question 46

advantages to decentralised structure .

Answer 46

increased job satisfaction decisions made by those who know customer needs

Question 47

disadvantages to a decentralised structure

Answer 47

employees who make decisions lack the skills of experienced decision makers decisions made to benefit an individual department and not the whole business

Question 48

advantages of a matrix structure

Answer 48

a flexible structure can better meet the particular needs of particular needs of a specific projects