Brainscape's Knowledge GenomeTM

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


See full index

OCR Business Unit 1 > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

What is a sole trader?

A

A sole trader is a form of business ownership with unlimited liability where the business is owned by just 1 person.

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

What is a partnership?

A

A partnership is a form of business ownership with unlimited liability where the business is jointly owned by 2-20 people. A Deed of Partnership has been drawn up to agree the terms of the partnership.

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

What is unlimited liability?

A

Unlimited liability is when the assets of the business owners are not separate from their personal assets. If the business goes bankrupt then the personal assets can be used to pay the company debts.

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

What is an asset?

A

Something that is owned by the business, such as a computer

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

What is a Deed of Partnership?

A

An agreement that sets out the terms of a business partnership including details like how the company is shared out, voting rights in the company, how to get out of the partnership.

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

What is a Private Limited Company?

A

A private limited company (ltd) is a form of business ownership where shares have been sold privately to friends and family who become owners. The company has limited liability.

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

What is a Public Limited Company?

A

A public limited company (PLC) is a form of business ownership where shares have been sold on the London Stock Exchange to any member of the public. These owners have limited liability.

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

What is limited liability?

A

Limited liability is when the assets of the business are separated from the owner’s private assets. If the business goes bankrupt then the personal assets can not be used to pay the company debts.

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

What is the advantage of being a sole trader?

A

Advantages of being a sole trader:

  1. The owner has greater control at work and can make their own business decisions.
  2. The owner does not share the profits that the company makes.
  3. It is the easiest form of business to set up.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the disadvantage of being a sole trader?

A

Disadvantages of being a sole trader:
1. The owner has the responsibility of taking all of the business decisions.
2. The owner does not have any other owners to invest capital into the business.
3. Unlimited liability
Sole Traders CAN employ staff - this is not a disadvantage.

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

What is capital?

A

Capital is money invested into the business.

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

What is the advantage of being a partnership?

A
  1. The owner can share business decision making and so share the responsibility
  2. The business can benefit from more capital investment
  3. The partner can bring new skills into the business
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the disadvantage of being a private limited company?

A
  1. Profits are shared between shareholders as dividends
  2. Business accounts have to be published giving competitors more information
  3. Decision making can be slower and more complicated as shareholders get a vote.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the disadvantage of being a partnership?

A
  1. The partners have to agree over decision making which can cause conflict and be slower.
  2. Profit must be shared between partners.
  3. Unlimited liability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the advantage of being a private limited company?

A
  1. More capital available from selling shares
  2. Limited liability
  3. You can control who can buy shares
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the advantage of being a public limited company?

A
  1. Much more capital available from selling shares
  2. Limited liability
17
Q

What is the disadvantage of being a public limited company?

A
  1. Profits are shared between shareholders as dividends
  2. Business accounts have to be published giving competitors more information
  3. Decision making can be slower and more complicated as shareholders get a vote.
  4. You can not control who can buy shares
18
Q

What is a dividend?

A

The share of the profit paid to shareholders

19
Q

What is an entrepreneur?

A

A person who starts their own business

20
Q

What are the characteristics of an entrepreneur?

A

Creative
Risk Taker
Determined
Confident

21
Q

What is the purpose of business activity?

A

To satisfy the needs of customers
To identify opportunity
To develop business ideas into reality

22
Q

What is the advantage of planning?

A

To reduce risk & help the business to succeed

23
Q

Why write a business plan?

A

To help get finance from a bank

To identify the resources needed to start or expand a business

24
Q

What goes into a business plan?

A

Business aims and objectives
Finance: Cash flow forecast
Budget for profit
HR: Staffing requirements
Operations: Location of the business
Marketing: marketing plan

25
Q

Name 5 business aims

A

Profit
Survival
Growth
Provide a service
Increase market share

26
Q

Why might business aims differ between businesses?

A

Size of the businesses
Age of the businesses
Ownership of the businesses

27
Q

Name 6 business stakeholders

A

Owners/Shareholders
Employees
Customers
Suppliers
Government
Community

28
Q

Which stakeholders are INTERNAL?

A

Owners, employees

29
Q

Which stakeholders are EXTERNAL?

A

Customers, Suppliers, Government, Community

30
Q

A business can grow internally, name another word for internal growth.

A

Organic

31
Q

What sort of growth describes when a business opens a new store?

A

Organic or internal growth

32
Q

How does a business grow externally?

A

Merge with or take over a competitor, a supplier or a retailer

33
Q

Name the 3 types of merger/takeover

A

Horizontal merger, vertical merger and diversification

34
Q

Describe diversification

A

When a business takes over or merges with a business that is unrelated to what it currently does eg if Apple bought out a coffee brand

35
Q

Describe vertical integration

A

When a business takes over or merges with a supplier or retailer eg if Apple bought out a business that made the glass for their phone screens

36
Q

Describe horizontal integration

A

When a business takes over or merges with a direct competitor eg if Apple bought out Samsung

37
Q

How does a business grow organically/internally?

A

Increase its output
Gain new customers
develop new products
increase its market share

OCR Business Unit 1 (1 decks)

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