Summere Test Questions

Question 1

What is a budget

Answer 1

A budget is a financial plan of expected future income and expenditure.

Question 2

Why do people prepare a budget

Answer 2

People create budgets to live within there means and to be aware about how much they are so and how much they are earning

Question 3

What is a balanced budget

Answer 3

A balanced budget refers to a situation where income exactly equals expenditure.

Question 4

What is a budget surplus

Answer 4

A budget surplus occurs when income is greater than expenditure.

Question 5

When does a budget deficit happen

Answer 5

A budget deficit occurs when income is less than expenditure.

Question 6

What can you do if you have a budget surplus

Answer 6

You can save or invest the money,use it to repay a loan or use it to fund some extra expenditure such as a family holiday

Question 7

How do u deal with a budget deficit

Answer 7

You can increase income buy taking on an extra part time job or work overtime. You could cut back on expenditure and only buy things you need or you could take out a loan.

Question 8

What is a commercial bank?

Answer 8

A commercial bank is a bank that offers financial services to the general public and to businesses.

Question 9

What is a current account

Answer 9

A current account is used for day-to-day banking needs. It is a convenient way for you to
Receive your income,Store money safely,
Pay for goods and services and Pay bills and transfer money to other people.

Question 10

Give me 2 ways money is lodged into an account.

Answer 10

An employer can transfers wages or salary directly into the account and your pension and benefits are paid directly into your current account

Question 11

What is a debit card for.

Answer 11

Debit cards allow consumers to pay for goods and services without using cash

Question 12

Define direct debit

Answer 12

A current account holder gives permission to another person or business to withdraw variable amounts from their account. Direct debit is used when the amount to be paid and/or the payment date are likely to change. The person or business who is owed money by the current account holder is called a creditor.

Question 13

What is standing order

Answer 13

A standing order is an instruction to a financial institution to pay a fixed amount to a specific person or organisation on a certain date.

Question 14

What is a credit transfer

Answer 14

A credit transfer is a once off instruction from a current account holder to their bank to transfer an amount of money to another account.

Question 15

What is a bank draft

Answer 15

This is like a cheque, but it is written on a bank’s own account rather than a customer’s account.

Question 16

What is a deposit account?

Answer 16

Deposit accounts offer a way of saving while earning interest. Money in deposit accounts is safe and secure.

Question 17

What is an exchange rate

Answer 17

An exchange rate is the price at which one currency can be exchanged for another.

Question 18

What is enterprises?

Answer 18

Enterprise is any attempt to start or do something new. Enterprise is about turning ideas into actions, using creativity and a willingness to try new things.

Question 19

What is a entrepreneur?

Answer 19

An entrepreneur is a person who takes the initiative as well as the personal and financial risk involved in setting up an organisation.

Question 20

Name 3 characteristics of an entrepreneur

Answer 20

Flexible
Entrepreneurs accept change as natural. They learn from their mistakes and failures by adapting when things don’t go according to plan.

Decisive
Entrepreneurs have the ability to make timely decisions and take responsibility for the decisions they make.

Realistic risk-takers
Entrepreneurs are willing to risk their money (and time) to set up a business with no guarantee of success.

Question 21

Name 3 skills of an entrepreneur

Answer 21

Planning and goal setting
Entrepreneurs learn to set strategic goals for themselves and their business using plans to achieve these goals. They also write a business plan when establishing their new/start-up business.

Time management
Entrepreneurs use their time carefully to achieve their goals. They make the best use of their time by prioritising daily tasks.

Ability to manage money
Entrepreneurs need to have good financial skills in order to prepare budgets and manage cash flow.

Question 22

Rewards of being an entrepreneur

Answer 22

You are your own boss and get to make all the decisions in the business.

You can choose to keep all the profit the business makes.

You can work flexible hours or have flexible opening hours to suit the needs of your customers.

Question 23

Risks of being an entrepreneur

Answer 23

You may lose the money you invested in the business if it fails. In some cases the
for unlimited
entrepreneur may lose their own money or personal assets. This is a major risk of
liability
starting business as a sole trader.

You will need to work long hours to get the business up and running and to oversee all aspects of the business.

You may find it difficult to take time away from running the business.

Question 24

What do entrepreneurs do in society

Answer 24

Provide services: Organisations started by social entrepreneurs provide a range of services and supports that help many people in the community. Examples include clubs and charities and they also Sponsorship

Question 25

Define the term market research

Answer 25

Market research is gathering, recording and analysing information about consumer preferences for a good or service in order to make informed decisions about a potential market.

Question 26

What is field research

Answer 26

Field research involves gathering information directly from the marketplace. Field research involves going to the the people who might buy your product or service to gather information first-hand for a specific purpose. It is also known as primary research and is carried out by making direct contact with existing customers or potential customers.

Question 27

What is desk research

Answer 27

Desk research involves analysing information that has already been collected. It is also known as secondary research and can be either internal or external.

Question 28

What is marketing

Answer 28

Marketing is the process of identifying and satisfying customer needs and wants while making a profit.

Question 29

What is market research used for?

Answer 29

Market research can be used to gather information about customers’ needs and
wants.

Question 30

What is a target market

Answer 30

A target market is the group of people to whom a business aims to sell its products or services.

Question 31

What is a niche market

Answer 31

A niche market is a small, specialised segment of a larger market for a particular product or service. For example, folding bicycles are a niche market: many people want bicycles, but only a small part of that market (e.g. commuters) want to use a folding bike.

Question 32

What is the marketing mix

Answer 32

The marketing mix is a combination of four elements that can help a business to market its products to its target market and maximise profits.

Question 33

What is a product lifecycle?

Answer 33

The product life cycle is the different stages that a product goes through from the time it is launched until it is taken off the market. It is usually illustrated on a five-stage diagram that shows the changes in product sales over time.

Question 34

What is a unique selling point?

Answer 34

A business will try to create a unique selling point(USP)got its product or service. This makes the product different from its competitors

Question 35

Define the term business plan

Answer 35

A business plan is a written description of a business’s aims, strategies, target markets and financial forecasts. It explains what the business plans to do and how it plans to do it.

Question 36

What are the 6 sections you need to make a business plan?

Answer 36

Section 1: Background of the business
> The aims and objectives of the business, i.e. what it is set up to do
• What products/services it will provide
> The name and address of the business.

Section 2: The business team
> The people involved in the business, including their educational details and past experience.

Section 3: Market and marketing
> A brief description of the market
> The current and potential size of the market
> The number of competitors already in the market
> The marketing mix strategy, including product, price, place and promotion.

Section 4: Production
> An outline of all premises and equipment available to the business
> The production process to be used, for example job production (single/one-off products), batch production (group of similar products) or mass production (products produced in very large quantities).
See Chapter
22 for marketing mix

Section 5: Costings and finance
> How much it costs to produce the item (cost price) and what mark-up/profit margin will be added on to get the price it will be sold at (selling price)
> Details about any existing loans that the business has
> The amount of finance required and the purpose for which it is needed
> How the finance is to be repaid
> Detailed cash flow forecasts and projected profits for two or three years.

Section 6: Structure of the business
> The legal structure of the business (sole trader, partnership, private limited company or franchise - see page 287).

Question 37

What is a SWOT analysis?

Answer 37

A SWOT analysis identifies the current strengths and weaknesses of a business as well as the opportunities and threats facing it.