Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A level Business > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

Explain the term ‘mission statement’

A

A written declaration regarding a business’ purpose for existence and core focus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the purpose of a mission statement?

A

Clear focus and guidance throughout the development of a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Explain the term ‘business objective’

A

Objective is a goal to help a business achieve its mission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

List common business objectives

A

Survival
Growth
Profit
Customer service
Corporate Social Responsibility (CSR)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

___ are the goals set out to achieve the ___ ___ of a business

A

Objectives are the goals set out to achieve the mission statement of a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Objectives should be ____

A

SMART

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Explain the term ‘Profit’

A

The amount of money remaining once all costs have been deducted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Explain the term ‘Revenue’

A

Money received from sales of products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Who is a business’s mission statement intended for?

A

Investors
Customers
Employees
Banks (to grant a loan)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the difference between a business aim and objective?

A

A business aim is a long-term goal the business wants to achieve.
A business objective is the short term steps required to meet its aim.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Explain the term ‘variable cost’ and give an example

A

Costs that change/vary as output changes

  • Raw materials
  • Wage
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How is profit calculated

A

Total sales - total costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Explain the term ‘fixed cost’ and give an example

A

Costs that remain the same even though output changes

  • Rent
  • Salary
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

The private sector falls into what categories?

A

Incorporated and Unincorporated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Describe a private sector business?

A

A business is controlled by individuals or groups of individuals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Describe a public sector business?

A

Owned and controlled by the government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Explain the difference between an Incorporated and Unincorporated businesses

A

Incorporated: owners have limited liability, legal difference between the business and and the owners.

Unincorporated: owners have unlimited liability, no legal difference between the business and the owners.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Explain the difference between unlimited and limited liability

A

Unlimited liability: owners of the business are liable for debts that the business owes, no separate legal identify, business and owners are viewed as one

Limited liability: owners have separate legal identity from the business, preventing the owners from being responsible for business debt.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

State two types of incorporated businesses

A

Public limited (PLC)
Private limited (LTD)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Describe the characteristics of the two types of incorporated businesses

A

PLC: shares can be sold on the stock market, rich in capital, financial statements must be published, expensive as minimum capital of 50,000 is required at all times

LTD: shares cannot be sold on stock market and cannot be sold without agreement of other shareholders, relatively smaller and family run

21
Q

State the two types of non-corporate businesses

A

Sole trader
Partnership

22
Q

What does a PLC and LTD have in common?

A

Limited liability

23
Q

Describe the characteristics of the two types of unincorporated businesses and give examples

A

Sole trader: owned by a single individual, could have a small number of employees - plumbing, hair dresser
Partnership: between 2-20 owners, dentists, accountants

24
Q

What does a sole trader and partnership form of business have in common

A

Unlimited liability

25
Q

Identify the benefits of a sole trader

A

+ simple
+ cheap
+ individual receives all profits
+ respond quickly to change
+ control over all decisions
+ financial statements are not required for publishing

26
Q

Identify the benefits of a partnership

A

+ wide range of skill and knowledge
+ risk of unlimited liability is reduced as its shared amongst the partners
+ generate greater profit than sole trader

27
Q

Identify the benefits of a PLC

A

+ shareholders benefit from limited liability
+ raise finance through share capital
+ growth and expansion possibilities

28
Q

Identify the benefits of a LTD

A

+ shareholders benefit from limited liability
+ complete control over business
+ required to publish minimal financial statements

29
Q

Identify the drawbacks of operating as a sole trader

A
  • difficulty in raising investment for expansion
  • unlimited liability
  • long working hours
30
Q

Identify the drawbacks of operating as a partnership

A
  • profit shared between partners
  • unlimited liability
  • complicated to sell/leave
  • difficulty in raising finance
31
Q

Identify the drawbacks of operating as a PLC

A
  • required to publish a great amount of financial statements
  • dividends to be payed at the end of the year
  • greater risk for hostile take over (business cannot control who and how many shares are bought)
  • expensive to set up
32
Q

Identify the drawbacks of operating as a LTD

A
  • dividends
  • time consuming to set up
  • conflict between friends and family
33
Q

Describe the characteristics of a ‘non for profit’ business

A

an organisation that has other business objectives than making profit

34
Q

What factors need to be considered when choosing a business form?

A

Size, risk, expenses, objectives, owners

35
Q

What reasons could be provided for changing business form?

A

Circumstances, capital, takeover

36
Q

Explain the term shareholder

A

Shareholders are part owners of a limited company that own at least one share

37
Q

Explain the term ‘ordinary share capital’

A

The money invested in a business by the shareholder

38
Q

Explain the term ‘dividends’

A

A financial reward given to shareholders from the accumulated profits earned at the end of the year.

39
Q

A shareholder has the right to play a role in major ___ within the business. These ___ need to be approved by the shareholders at a general meeting called by the directors.

A

A shareholder has the right to play a role in major decisions within the business. These decisions need to be approved by the shareholders at a general meeting called by the directors.

40
Q

Why would an individual invest in shares?

A

Source of income as dividends is received.
Capital growth - hope that the value of share will increase

41
Q

Describe what factors influence share price

A
  • Business performance (low performance = low value)
  • Changes within the market (trends)
  • External world uncertainties
  • Expectation of better or worse profit performance
42
Q

Explain the term market capitalisation and provide its formula

A

The value of all a business’s shares, calculated by multiplying the share price by number of shares issued.

Share price x number of shares issued

43
Q

What aspects in the external environment affects cost and demand?

A

P olitical
E conomical (interest rate, incomes)
S ocial (trends)
T echnological
L egal
E nvironmental (population, age)

43
Q

Explain the term ‘interest rate’

A

A reward for saving and the cost for borrowing expressed as a percentage of money saved or borrowed.

44
Q

Describe what GDP measures

A

Gross Domestic product: measures the economic growth of a country by identifying the value of output produced by a country

45
Q

Explain the term ‘market demand’

A

Measures how much of a good a consumer wants

46
Q

What factor depends on interest rates

A

Consumer spending depends of interest rates as a high interest rate encourages saving, low interest rate encourage spending

47
Q

Explain how a high interest rate effects consumers spending

A

A high interest rate makes borrowing more expensive reducing consumers disposable income encouraging consumers to save.

A level Business (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions