Subject specific vocabulary

Question 1

Advertising

Answer 1

A method of communicating information about the product; the business pays for advertising time/space.

Question 2

Aim

Answer 2

The intention to reach a goal.

Question 3

Air pollution

Answer 3

The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment.

Question 4

Asset

Answer 4

Something the business owns; it has a value.

Question 5

Average rate of return

Answer 5

The average profit for the year as a percentage of the original investment. Average rate or return=average return per annum / intial x 100.

Question 6

Boston matrix

Answer 6

A tool for analysing the contribution made by each product in a business’ product portfolio. It plots each product’s position according to its market share and the rate of growth of the market.

Question 7

Brand image

Answer 7

The consumers’ perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns.

Question 8

Break-even chart

Answer 8

A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.

Question 9

Buffer stock

Answer 9

A stock of raw materials held in reserve to protect the production process from unforeseen shortages.

Question 10

Business plan

Answer 10

A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.

Question 11

Cash

Answer 11

Money that the business has in cash or at the bank.

Question 12

Cash flow forecast

Answer 12

A financial planning too that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finanafe may be needed to maintain liquidity.

Question 13

Cash inflow

Answer 13

Money recieved by the business to fund its operations or investment activities.

Question 14

Cash outflow

Answer 14

Money paid out by the business to fund its operations or investment activities.

Question 15

Centralisation

Answer 15

Maintaining control by keeping authority at the senior levels of the organisation.

Question 16

Chain of command

Answer 16

The line through the hierarchy that shows who is responsible for whom from top to bottom of an organisation.

Question 17

Channels of distribution

Answer 17

The route the ownership of the product transfers from the seller to the buyer; it may be a single transcation or pass through others such as wholesalers, distributors agents and retailers.

Question 18

Closing balance

Answer 18

The amount that remains in the account at the end of an accounting period.

Question 19

Commission

Answer 19

An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary.

Question 20

Cost-plus pricing

Answer 20

Setting the price of a good or service at an amoung higher than the cost of producing it so that a profit is made.

Question 21

Decentralisation

Answer 21

Where authority is spread widely through the organisation.

Question 22

Delayering

Answer 22

The reorganisation of the organisation’s employees so that there are fewer levels of management.

Question 23

Delegation

Answer 23

Allocating a task to someone who would not normally be responsible for it.

Question 24

Demand

Answer 24

The quantity of a particular product that will be bought at particular price over a specific time.

Question 25

Diseconomies of scale

Answer 25

When a business grows too large, leading to a possible increase in unit cost.

Question 26

Disposal waste

Answer 26

The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.

Question 27

Dividend

Answer 27

A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.

Question 28

E-commerce

Answer 28

Business transactions carried out electronically on the internet.

Question 29

Economies of scale

Answer 29

The cost advantage of producing on a large scale. As output increases the unit cost decreases.

Question 30

Enterprise

Answer 30

The ability to identify busines ideas and oppurtunities to bring them to fruition and to take risks where appropriate.

Question 31

Entrepreneur

Answer 31

A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.

Question 32

Equality act (2010)

Answer 32

Protects people from discrimination in the workplace and in wider society. It sets out the different ways in which it is unlawful to treat someone.

Question 33

Factors of production

Answer 33

The elements that combine in the production process: land, labour, capital and enterprise.