Unit 1: Business organization and environment

Question 1

What are the 4 sectors of a business?

Answer 1

Primary - Extraction of raw materials
Secondary - manufacturing or construction of products
Tertiary - A service
Quaternary - Creation or sharing of knowledge

Question 2

Cost of good sold? (COGS)

Answer 2

opening stock + purchases - closing stock

Question 3

Minus interest or tax first in profit and loss?

Answer 3

interest then tax

Question 4

what are dividends?

Answer 4

refers to the payment that a company gives to its shareholders according to the number of shares they already own

Question 5

Internal sources of finance?

Answer 5

money that comes from within a business such as retained profit, owner’s capital and sale of assets

Question 6

External sources of finance?

Answer 6

money that comes from outside a business such as share capital, overdraft, loan capital and trade credits

Question 7

Balance sheet?

Answer 7

a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time

Fixed assets + current assets - current liabilities - long-term liabilities = net assets = equity

Question 8

Title of a balance sheet?

Answer 8

(Company name)
Balance sheet as of (Date given)

Question 9

What is share capital?

Answer 9

the money a company raises by selling shares

Question 10

Difference between entrepreneur and intrapreneur?

Answer 10

Entrepreneurs create a business, take financial and personal risks and are accountable for the success or failure of their venture. Intrapreneurs use their passion and skills to produce profitable innovation, but do not risk their own resources.