Unit 1

Question 1

Why does a business exist ?

Answer 1

• to provide goods and services including public service.
• to develop an idea (enterprise)
• to provide help to others e.g charity’s

Question 2

What is a mission statement ?

Answer 2

A mission statement is a declaration from a business that states there purpose and focus

Question 3

What’s the purpose of a mission statement ?

Answer 3

To help bring focus and meaning to a business and help them make big decisions

Question 4

Name 5 business objectives ?

Answer 4

• Survival
• growth
• profit
• market share
• ethical

Question 5

What’s the difference between a mission statement and a businesses objectives ?

Answer 5

A mission statement is the business’s cove values and principles that help guide them and the objectives are goals set to achieve the overall mission

Question 6

What does the SMART stand for ?

Answer 6

Specific by S
Measurable M
Achievable A
Realistic R
Time bound T

Question 7

What is profit ?

Answer 7

The amount of money remaining once all costs have been deducted from the revenue

Revenue - Costs = Profit

Question 8

What’s revenue ?

Answer 8

The money received from sales

Question 9

What’s a variable cost ?

Answer 9

Costs directly related to output meaning they will change dependent on the business

e.g sales revenue

Question 10

What are fixed costs ?

Answer 10

Fixed costs are costs that are fixed so they will not change and they always have to be payed

Question 11

What are the two corporate businesses ?

Answer 11

LTD

PLC

Question 12

What are the two non corporate businesses ?

Answer 12

Sole traders

Partnerships

Question 13

Describe limited liability ?

Answer 13

This is what limited company’s have and it means if the business has to repay debt the owners assets are protected

Question 14

What is unlimited liability ?

Answer 14

This is what non corporate businesses have and it means they’re assets are not protected if the business falls into debt