unit 2

Question 1

registering a website domain,
Why is it done? What considerations are involved in a domain name

Answer 1

Easy to remember,
,Reflects on the business,
Is unique

Question 2

registering the business name,
Why is it done? What does a business name mean?

Answer 2

A business name is a legal name under which a business operates and conducts its business activities .It is done so businesses have legal rights, level of exclusivity and protection, helps prevent confusion among consumers and so the business can run legally.

Question 3

trade practice legislation

Answer 3

a method of competition, operating policy and business procedures eg work safe or fair trading laws

Question 4

work safe insurance, how might a injured worker need support?

Answer 4

Replacement of lost income,
Medial and rehabilitation costs,
Legal costs ,Lump sum compensation in the event of a serious injury

Question 5

Why should business owners have seperate bank accounts

Answer 5

it is easier to monitor the financial performance and position of the business if it has a separate account to that of its owner. and
It is easier to calculate business expenses, such as bank fees, and revenue, such as interest earned, which makes it less time consuming and costly to prepare tax returns for the business.

Question 6

Financial control systems

Answer 6

Financial control systems allow a business owner to monitor and manage its financial performance.

Question 7

Budgeting

Answer 7

Budgeting refers to predicting or estimating the businesses financial performance for a given period.
Actual budgets can be compared with predicted budgets in order to examine unexpected losses or gains.

Question 8

The importance of maintaining records

Answer 8

It is a legal obligation.
It is a valuable tool for decision-making.
It can ask as verification of a business’ success, and could be used to gain investors.

Question 9

Cash flow management

Answer 9

Businesses need access to cash (cash flow) in order to conduct business.
In completing a cash flow budget, a business could anticipate the cash they are likely to have, and make plans if there could possibly be a deficit.

Question 10

Accounts receivable

Answer 10

Accounts receivable refers to the outstanding invoices or payments that a business has. (This is cash waiting to come into the business.)

Question 11

Inventory control

Answer 11

The term inventory refers to the entire stock of a business, including materials, components, work in progress, and finished products.
Businesses need to track (control) inventory in order to ensure:
Stocked items are regularly selling. (If an item is unpopular, it may be taking up shelving space from an item that could sell more successfully.)
Sales are equal to the reduction in stock.
Stock is not wasted - e.g. there is not an overstock of perishable items.

Question 12

Auditing

Answer 12

Auditing is the process of testing and evaluating a business’ accounting processes and internal controls.
This may be done internally or externally.

Question 13

Source documents

Answer 13

Source documents can vary, but most include:
The date of transaction
The names (if applicable) of the parties involved
The nature of the transaction
The amount of money involved

Question 14

Cash book

Answer 14

The main objective of cash book is to record all cash receipts and cash payments regardless of their nature and to ascertain cash balance in hand at the end of the period.
A cash book normally consists of two sections.
Receipts (cash in) on the LHS and payments (cash out) on the RHS

Question 15

Storage of records

Answer 15

Records can be stored electronically, but it is the business’ responsibility to ensure they are backed up and secure.

Question 16

Balance Sheet

Answer 16

Balance Sheet
A balance sheet provides a picture of what a business owns (assets) and owes (liabilities) and the owner’s equity on a particular date.
It represents the net worth of the business.

Question 17

Income statements

Answer 17

The income statement (also called the revenue statement or the profit and loss statement) measures a company’s financial performance (net profit) - taking into account revenue, expenses, profits and losses over a specific period of time.

Question 18

Choosing suppliers

Answer 18

The right supplier is important in terms of quality, price and reputation of the business.
Procurement is the process of researching and selecting suppliers, establishing payment terms, negotiating contracts and the purchasing of resources that are vital in maintaining the business.
Depending on your branding and target market, you may have different priorities when choosing your supplier. Most businesses will consider a combination of the factors to the right.

Question 19

Quality

Answer 19

If a brand wishes to market themselves as offering quality products, they will need to source quality materials.
Suppliers also need to ensure their materials are in compliance with Australian standards.

Question 20

Reliability

Answer 20

Reliability
Reliable supply of stock is important so that a business can, in turn, consistently offer their products to consumers.

Question 21

Proximity

Answer 21

A local supplier can offer convenience and cost savings (in terms of shortening the travel time).
Less time shipping goods is also more environmentally friendly.

Question 22

choosing suppliers that meet Corporate social responsibility

Answer 22

Choosing a supplier based solely on cost, who has a poor record socially, could harm the business’ reputation.
A business would be wise to consider the financial, social and environmental practices of their suppliers.

Question 23

Policies

Answer 23

Institutions - businesses, schools, sports clubs - develop policies in order to create codes of conduct for their particular purposes.
These policies could work to outline, for example, appropriate guidelines so that a business establishes a positive culture, is legally compliant and/or is working in the right direction.

Question 24

Procedures

Answer 24

A procedure is a series of actions that enable a policy to be put into practice. Procedures may exist for:
Paying accounts
Handling grievances
Dealing with customer complaints
etc.