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Year 11 Business Studies > Role Of A Business > Flashcards

Role Of A Business Flashcards

1
Q

Define Business

A

The organised effort to produce and sell, for a profit, the products that satisfy consumers wants and needs.

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2
Q

Define Product

A

A good or service that can be bought or sold

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3
Q

Define goods

A

A tangible item that can be seen or touched

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4
Q

Define Service

A

An intangible thing done for you by others

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5
Q

What is the purpose of a business producing products for sale in the market?

A

By producing products for sale on the market, the business hopes to achieve a profit.

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6
Q

What is a finished product?

A

A product ready to buy and sell.

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7
Q

List the main activities undertaken by a business

A

*Management
*organising natural, capital and human resources.
*Distributing goods and services.
*Planning finances, production and business needs
* sales, expenses and profits.
* controlling production – quantity and quality.
* marketing products.
* production – creating product

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8
Q

What is revenue?

A

The money of business receipts as payment for its products.
(Eg. sales)

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9
Q

What are operating expenses?

A

The cost of running a business

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10
Q

What is profit?

A

What remains after all business expenses have been deducted from sales revenue

Sales revenue-operating expenses

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11
Q

How can profit be regarded as a reward?

A

Profit is what remains after operating costs have been deducted from the sales revenue. The businesses profit becomes the owners property. That is how profit can be regarded as a reward.

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12
Q

Define risk?

A

The possibility of loss

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13
Q

What determines the number of employees accompany will have?

A

It depends on the nature of products being sold, and the number of customers, a business has.

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14
Q

What type of business hires half of Australians employees?

A

The type of business that hires half of Australia’s employees are small to medium enterprises (SME)

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15
Q

What is the aim of small businesses?

A

Many small business owners aim to continue their business to provide employment for their families.

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16
Q

Define income

A

Income is the money received by a person for providing their labour.

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17
Q

Define wage?

A

Wage is money received by workers, usually on a weekly basis, for services provided to their employer

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18
Q

Define salary

A

Salary is a fixed amount of money, paid fortnightly of monthly, to a permanent employee of a business

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19
Q

Define shareholder

A

Shareholder are people who are part-owners of a company because they own its shares

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20
Q

Define dividends

A

Dividends are a part of a businesses profit that is divided among shareholders

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21
Q

When can a business offer higher income payments to employees, business owners, or shareholders?

A

A business can offer a higher income payment to employees, business owners, or shareholders when customers are satisfied and there is an increase in sales revenue

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22
Q

Define choice

A

Choice is the act of buying or selling a product amongst alternatives
(Eg. Similar products with different brands, designs, colours, shapes, textures, packages, sizes, and prices: milk, bread, coffee

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23
Q

When does the freedom of choice exist?

A

Freedom of choice exists when consumers are able to shop around and select from a range of competitors products

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24
Q

Define innovation

A

Innovation is an improvement on something already existing
Eg. Digital cameras

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25
Q

Define invention

A

Invention is the development of something new which will satisfy a need that is not presently satisfies.

26
Q

What is Research and Development (R&D)

A

Research and development is a set of activities undertaken to: improve existing products, create new products, and improve production

27
Q

Finish the sentence
SME’s generally didplay a ___ attitude towards innovation, and constantly ___, develop, and ___ new ideas and products

A
  • Positive
  • Research
  • Test
28
Q

Define entrepreneur

A

An entrepreneur is someone who starts, operates, and assumes the risk of a business venture in the hope of making a profit

29
Q

Entrepreneurs take risks to:

A

Entrepreneurs take risks because they usually explore untapped markets with no track record of proven customer demand or returns guaranteed

30
Q

What is wealth creation?

A

The more that is produced, the more wealth is generated within the Australian economy.

31
Q

What is value add?

A

Value add is calculated by finding the difference between operating expenses and sales and is called profit or wealth

32
Q

Where is wealth distributed to?

A

Employees
Governments
Lenders
Owners/Shareholders
The business

33
Q

Define quality of life

A

Quality of life refers to the overall wellbeing of an individual and is a combination of both material and non material benefits

34
Q

List 3 different sizes of a business and identify the number of employee they have

A
  1. Small: less than 20 employees
  2. Meduim: between 20-199 employees
  3. Large: more than 200 employees
35
Q

What are SME’s and what is their importance to the Australian economy?

A

SME’s are small to medium enterprises.
They create new jobs, and therefore employ half of Australian employees.
They keep the economy running

36
Q

List the measurements that can be used to determine the size of a business

A
  1. Number of employees
  2. Number of owners
  3. Market share
  4. Legal structure
37
Q

What is market share?

A

Market Share refers to the business’s share of the total industry sales for a particular product.

38
Q

What is a micro business?

A

A micro business has less than 5 employees, including the owner

39
Q

What is the difference between quantitative and qualitative measures?

A
  • Quantitative: numeric data
  • Qualitative: descriptive data
40
Q

What is geographical spread?

A

Geographical spread is the presence of a bsuiness and the range of its products across a suburb, city, state, country, or the globe.

41
Q

What are the 3 geographical spreads?

A

Local
National
Geographical

42
Q

List 4 interrelated forces leading to business expansion.

A

Increase sales
Increase profits
Increase market share
Global customers

43
Q

What is an industry?

A

An industry consists of businesses that are involved in similar types of production

44
Q

What are the classifications of an industry sector?

A

The classifications of an industry sector are:
- Primary
- Secondary
- Tertiary
- Quaternary
- Quinary

45
Q

Define primary industry with examples

A

A primary industry includes all businesses in which production is directly associated with natural resources:
- Farming
- Fishing

46
Q

Define secondary industry with examples

A

The secondary industry invokes using raw materials and manufacturing them into finished or semi-finished products.

47
Q

Define teriary industry with examples

A

The tertiary industry involes performing a service for other people
- retailers
- bank
- bank
- healthcare workers

48
Q

Define quaternary industry with examples

A

Quaternary industry includes services that invole the transfer and processing of knowledge and information
- finance
- computing
- education
- telecommunications

49
Q

Define quinary industry with examples

A

The quinary industry industry includes all services that have traditionally performed at home
- childcare
- hospitality

50
Q

Define the term sole trader

A

A sole trader is a business that is owned and operated by 1 person

51
Q

List 4 rights/responsibilities of a sole trader

A
  • employ people
  • take responsibility for decisions
  • provide finance
  • make decisions
52
Q

Legally, what does a business need to establish itself? Provide an example

A

To legally establish itself, a business is required to register the businesses name if the name is different from its owners.
Jones mowing + gardening = register
Jones John mowing = no register

53
Q

Define unlimited liablility

A

Unlimited liability happens when the business owner is personally responsible for all the debts of their business
(Legal responsibility)

54
Q

Advantages of being a sole trader

A
  • lost cost of entry
  • simplest form
  • owner keeps profit
55
Q

Disadvantages of being a sole trader

A
  • need to carry all loses
  • burden of operating
  • personal (unlimited) liability for debts
56
Q

Define incorperated

A

The term incorporated refers to the process companies go through to become a separate legal entity from the owner/s.
(If the owner has debt it is seperate from the business)

57
Q

Define unincorperated

A

A business is legally regarded as the same entity from its owner
(Owner has debt, business also has debt)

58
Q

Define limited liablility

A

Limited liablility is a feature of corporate ownership that limits each owners financial liability to the amount of money paid for a businesses shares

59
Q

Define ‘veil of incorporation’

A

Veil of incorporation refers to the business owner hiding behind the company, becoming seperate legal entities, so personal assets are protected.

60
Q

What different things can a seperate legal entity do? (Limited Liability)

A

A seperate legal entity can sue, be sued, buy property, sell property, be held legally responsible, keep existing after owners death (propetual succession)

Year 11 Business Studies (4 decks)

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