Business

Question 1

Adding Value

Answer 1

A process where a business increases the worth of the resources included in production so that customers think that the product is worth more

Question 2

Advisor

Answer 2

Someone outside of the business that provides advice and support

Question 3

Bank Loan

Answer 3

A fixed amount loan from a bank which is generally used to finance long-term assets

Question 4

Bank Overdraft

Answer 4

Borrowings from a bank on a current account which are playable on demand

Question 5

Break-even output/point

Answer 5

The point where a business is neither making a loss or profit

Question 6

Budgeted

Answer 6

A detailed plan of income and expenses expected over a certain period of time

Question 7

Business Angel

Answer 7

An invester who is willing to invest in high-risk, high-growth firms at a very early stage

Question 8

Business Plan

Answer 8

A detailed description of a new or existing business, including the company’s strategy, aims and objectives, marketing and financial plan

Question 9

Business Objective

Answer 9

A stated goal or target of a business

Question 10

Cash Flow

Answer 10

How much cash is coming into and out of a business

Question 11

Cash Flow Forecast

Answer 11

A projection, usually by week or month, of the likely cash inflows and outflows

Question 12

Contribution

Answer 12

The difference between total sales and total variable costs

Question 13

Contribution per unit

Answer 13

The difference between selling price per unit and variable cost per unit

Question 14

Costs

Answer 14

Amounts incurred by a business as a result of its trading operations

Question 15

Demand

Answer 15

The amount of a product or service that customers are willing and able to pay at a given time

Question 16

Demographic

Answer 16

The type of person a market is made up of

Question 17

Elasticity of Demand

Answer 17

The responsiveness of demand to a change in price or incomes

Question 18

Electronic Market

Answer 18

A market in which buyers and sellers are brought together using digital means of communication in order to exchange information and conduct transactions

Question 19

Enterprise

Answer 19

The process by which new business are formed in order to offer products and services in a market

Question 20

Entrepreneur

Answer 20

Someone who sets up and runs a new business

Question 21

Expenditure Budget

Answer 21

The budget which sets out the expected costs to be incurred by the firm, usually split into various categories

Question 22

Fixed Costs

Answer 22

Costs that do not vary with the level of output (e.g. rent, salaries)

Question 23

Franchisee

Answer 23

The person or company which operates a franchised business format - under licence from a franchisor

Question 24

Franchisor

Answer 24

The owner of a business format (franchisee) which is licences out to other people or businesses

Question 25

Full-time emplyee

Answer 25

An employee who works more than 30 hours a week in a business

Question 26

Income budget

Answer 26

The budget which sets out estimates of the likely demand for and value of the firms sales

Question 27

Inputs

Answer 27

The resources (land, labour, capital, enterprise) that go into producing goods and services

Question 28

Limited Liability

Answer 28

Shareholders are only liable for the money they have invested - not for the overall debts and liabilities of their company

Question 29

Location

Answer 29

The places from which a firm does business.

Question 30

Margin of Safety

Answer 30

The difference between the actual level of output and the break even output

Question 31

Market

Answer 31

Where buyers and sellers come together in a marketplace (physical, virtual) to exchange transactions