Topic 1(measuremnt Of Proft-

Question 1

What is revenue

Answer 1

Total financial income made from sales

Question 2

What is the formula for revenue

Answer 2

Price x quantity sold

Question 3

What is the formula for profit

Answer 3

Revenue - total costs

Question 4

What is the formula for total costs

Answer 4

Fixed costs + variable costs

Question 5

What is profit

Answer 5

The revenue after the costs

Question 6

What is the formula for total variable costs

Answer 6

Variable cost per unit x output

Question 7

What are other terms used for revenue

Answer 7

Sales
Income
Turnover
Earnings
Takings

Question 8

What is formula for gross profit

Answer 8

Revenue - variable costs

Question 9

What is formula for operating profit

Answer 9

Gross profit - fixed costs

Question 10

What is formula for net profit

Answer 10

Operating profit - tax

Question 11

What is cash

Answer 11

The money inside the business required to meet short term debts

Question 12

What is profit satisfying

Answer 12

When a business tries to make enough profit to keep owners uncomfortable

Question 13

What are economies of scale

Answer 13

When buying in bulk is cheaper than buying a certain amount of those products individually

Question 14

What is limited liability

Answer 14

2 separate legal entities

Question 15

What is unlimited liability

Answer 15

Business and owner are one legal entity

Question 16

What is a sole trader

Answer 16

One person running a business with unlimited liabilty

Question 17

What is a partnership

Answer 17

2-20 sole traders working together with unlimited liability

Question 18

Advantages of being sole trader

Answer 18

Keep all profits
Choose working hours
Make all decisions
Own customer base

Question 19

Disadvantages of being a sole trader

Answer 19

High rate of tax
Unlimited liability
Less sources of finance
Can’t sell shares
Personal possessions liable
100% workload

Question 20

Advantages of a partnership

Answer 20

Shared workload
Split liability
More ideas
Wider skill set
Competitive advantage

Question 21

Disadvantages of a partnership

Answer 21

Disagreements
Less source of finance
Shared responsibility of debt
Legal documentation can be time consuming

Question 22

How is a private sector split

Answer 22

Unincorporated and incorporated

Question 23

What businesses are unincorporated

Answer 23

Sole trader and partnerships

Question 24

What businesses are unincorporated

Answer 24

Public limited company (PLC)
Private limited compan(LTD)

Question 25

What is public sector

Answer 25

Owned by the government

Question 26

What are the differences between the sectors

Answer 26

The efficiencies and operations

Question 27

What is privatisation

Answer 27

When the government sells a business in the public sector (sells shares)

Question 28

What is nationalisation

Answer 28

When the government takes over a business in the private sector(buys the shares)

Question 29

What does an incorporated company mean

Answer 29

This means they have become registered on companies house and once registered they have limited liability

Question 30

What is liabilty

Answer 30

Who is legally responsible for the debts and assets of a business

Question 31

What are assets

Answer 31

What the business owns

Question 32

What can Ltd do?

Answer 32

Can invite shareholders

Question 33

What is a public limited

Answer 33

The business is floating on the stock market so everyone can buy shares

Question 34

What are venture capitalists

Answer 34

Organisation that employs people to invest in high risk businesses

Question 35

What are business angels

Answer 35

Someone who invests for reasonable equity up to 1 million