Section C

Question 1

-What action may managers need to take if there is a fall in sales overall?

Answer 1

• boost marketing
• ask for customer feedback- how to improve
• communicate targets with employees
• market research on competitors

Question 2

What action may managers need to take if there is a fall in sales for a specific product or service?

Answer 2

• Advertise it more e.g. Manager special
• Discount it
• Discontinue it

Question 3

What action may managers need to take if there is missing stock?

Answer 3

• Investigate e.g. CCTV
• May recount and double check figures
• Replace stock

Question 4

What action may managers need to take if there is understaffed areas?

Answer 4

• redeployment of staff
• hire new staff

Question 5

What action may managers need to take if there is depleted stock?

Answer 5

• purchase more stock
• increase prices
• do regular checks of popular stocks

Question 6

What does HMRC stand for?

Answer 6

his majesties revenue and customs

Question 7

What is HMRC?

Answer 7

the UKs tax, payments and customs authority to collect money that pays for the UKs public services and help families and individuals with targeted financial support

Question 8

Why is recording transactions in accounting important for a business?

Answer 8

• keeps the business records accurate and up to date which is important for the smooth running of a business
• this is so you can pay the money you owe, chase payments owed to you, pay appropriate taxes

Question 9

Why is accounting important for the management of a business??

Answer 9

• so they can make informed descisions if oyu have an accurate financial picture
• are able to better coordinate and plan the use or resources
• ensure there is sufficient money to pay wages, stock ect.

Question 10

Define capital income.

Answer 10

money invested by the owners or other investors that is used to set-up a business or buy additional equipment.

Question 11

Define revenue income.

Answer 11

money that comes into the business from performing day to day functions such as the selling of goods or providing a service.

Question 12

Define fixed assets.

Answer 12

items of value owned by a business that are likely to stay in the business for more than one year

Question 13

What are the 5 types of capital income?

Answer 13

loans
mortgages
shares
owners capital
debentures

Question 14

What is a laon?

Answer 14

• money lent to a business or its owners by a bank or financial institution
• monthly payments are set up to pay back the money with interest
• they are often secured against an asset

Question 15

What is a mortgage?

Answer 15

• like a loan but for larger sums
• used to buy a premises eg. retail store, factory, warehouse

Question 16

What is a share?

Answer 16

• when shareholders become part owners of the company
• they contribute towards the capital income
• the more money they put in the more shares they have

Question 17

What is owners capital?

Answer 17

money invested into a company from the owners personal savings

Question 18

What is debentures?

Answer 18

its a type of business loan and is repaid as a lump sum on an agreed data with interest

Question 19

What are the 5 types of revenue income?

Answer 19

sales
rent received
commission received
interest received
discount received

Question 20

how is commission a source of revenue income?

Answer 20

if a business sells another businesses product or service, they will receive a percentage of the total sales price as commission

Question 21

define capital items

Answer 21

assets bought from capital expenditure such as machinery and vehicles that will stay in a business for more than a year

Question 22

define statement of financial situation

Answer 22

a financial document that shows the net worth of a business by balancing its assets against its liabilities it is often called a balance sheet.

Question 23

define depreciation

Answer 23

an accounting technique used to spread the cost of an asset over its useful life e.g. a vehicle.

Question 24

Define expenditure.

Answer 24

money spent by a business

Question 25

Define capital expenditure

Answer 25

money spent by a business or organisation on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

Question 26

Define revenue expenditure

Answer 26

business spending on day-to-day items e.g. rent and utilities. (this will impact on profit)

Question 27

Define non-current assets

Answer 27

They are items owned by a business that will remain in the business for the medium to long term

(These assets are shown in the statement of financial position)

Question 28

Define intangibles

Answer 28

Something that can’t be touched but adds value to the business.

Question 29

Give examples of non-current assets

Answer 29

land, premises, vehicles, machinery, equipment - also called tangible assets

Question 30

What are the 4 common intangible assets?

Answer 30

• goodwill
• patents
• trademarks
• brand name

Question 31

Define goodwill

Answer 31

when you buy an existing business so its name and reputation is already known

Question 32

Define patent

Answer 32

the legal protection an invention receives to reward the inventor for taking risks, therefore other businesses aren’t allowed to copy it

Question 33

Define trademark

Answer 33

a symbol, logo, brand name, words, or even a colour that sets them apart from other businesses

Question 34

Define brand name

Answer 34

a promise of what to expect, it is recognised by customers which sets the business apart from others

Question 35

What are the benefits of goodwill?

Answer 35

• most likely have existing customers
• increases value of the business

Question 36

What are the 2 types of capital items?

Answer 36

non-current assets
intangibles

Question 37

Give examples of revenue expenditure

Answer 37

inventory
rent
rates
heating and lighting
water
insurance
salaries
wages
marketing
interest for loans etc.
depreciation

Question 38

What is straight line depreciation?

Answer 38

when an asset depreciates by a certain amount each year

Question 39

What is reducing balance depreciation?

Answer 39

when an asset depreciates by a set percentage of its remaining value each year