Finance and People In Business

Question 1

Budgetary control or Budgeting

Answer 1

A business system which involves making future plans, comparing the actual results with the planned results and then investigating causes of any differences.

Question 2

Variance

Answer 2

The difference between actual financial outcomes and those which were budgeted.

Question 3

Variance analysis

Answer 3

The process of calculating variances and attempting to identify their causes.

Question 4

Zero - based budgeting or zero budgeting

Answer 4

A system of budgeting where no money is allocated for costs or spending unless they can be justified by the fundholder (they are given a zero value).

Question 5

Creditors

Answer 5

Those to whom a business owes money for goods or services delivered but not yet paid for.

Question 6

Credit control

Answer 6

The process of monitoring and collecting the money owed to a business.

Question 7

Debtors

Answer 7

Those who owe a business money for goods or services delivered but for which they have not yet paid.

Question 8

Overtrading

Answer 8

A situation where a business does not have enough cash and other liquid resources to support its production and sales.

Question 9

Trade credit

Answer 9

Given when a supplier allows a customer to receive goods or services but pay for them at a later point in time. Typically, trade credit is given for 30 days.

Question 10

Gross Profit

Answer 10

Total sales revenue or turnover minus cost of sales, the direct costs of production.

Question 11

Gross profit margin or mark-up

Answer 11

Gross profit expressed as a percentage of turnover.

Question 12

Net profit

Answer 12

Total sales revenue or turnover minus cost of sales and overheads.

Question 13

Net profit margin

Answer 13

Net profit expressed as a percentage of turnover.

Question 14

Profit margins

Answer 14

Profit expressed as a percentage of turnover.

Question 15

Return on capital

Answer 15

The amount of profit expressed as a percentage of the capital invested in a business.

Question 16

Authority

Answer 16

The right to command a situation, a task or an activity.

Question 17

Chain of command

Answer 17

The way authority and power are passed down in a business.

Question 18

Delegation

Answer 18

Authority (and sometimes responsibility) to pass down from superior to subordinate

Question 19

Formal organisation

Answer 19

The relationships between employees and the organisational structure determined by the business, as shown in an organisation chart.

Question 20

Hierarchy

Answer 20

The order or levels of management of a business, from the lowest to the highest.

Question 21

Informal business structure

Answer 21

The relationships between employees that are based on the common interests of employees.

Question 22

Organisation chart

Answer 22

A diagram which illustrates the structure of an organisation.

Question 23

Organisational or business structure

Answer 23

The way in which a business is organised.

Question 24

Responsibility

Answer 24

Being accountable and required to justify an action.

Question 25

Span of control

Answer 25

The number of subordinates working under a supervisor.

Question 26

``` Rate of absenteeism OR Absenteeism rate OR Absentee rate ```

Answer 26

The number of staff absent as a percentage of the total number of staff employed. It can be calculated for different periods of time, i.e. daily rates or annual rates.

Question 27

Work-life balance

Answer 27

The relationship between time spent at work and time spent away from work. The time spent at work as a proportion of total time.

Question 28

Curriculum vitae

Answer 28

A brief description of an individual's personal details, experience and qualifications

Question 29

External recruitment

Answer 29

When an employer looks for applicants for a job from outside the organisation.

Question 30

Internal recruitment

Answer 30

When an employee seeks to find applicants for a job from inside the organisation.

Question 31

Interview

Answer 31

A meeting where an applicant answers questions from and asks questions of selectors for a job.

Question 32

Job analysis

Answer 32

A study of what the job entails, such as skills, tasks and performance expected.

Question 33

Job description

Answer 33

A statement of the tasks to be undertaken and responsibilities of the employee holding the job.

Question 34

Person specification

Answer 34

A description (or profile) of the personal qualities that match the requirements of the job specification.

Question 35

Psychometric tests

Answer 35

Tests which aim to uncover the personality of individuals.

Question 36

Induction training

Answer 36

Training which occurs when a worker starts a job with a business.

Question 37

Market failure

Answer 37

When the operation of free market forces fails to provide an optimum level of output.

Question 38

Off-the-job training

Answer 38

Training which takes place outside the business through an external training provider like a local college or university.

Question 39

On-the-job training

Answer 39

Training given in the workplace by the employer.

Question 40

Training

Answer 40

The process of increasing the knowledge and skills of workers so that they are better able to perform their jobs.

Question 41

What are five attributes of Maslow's hierarchy of needs?

Answer 41

``` Self-actualisation Esteem needs Love and belonging Safety needs Physiological needs ```

Question 42

Hawthorne effect

Answer 42

The idea that workers are motivated by recognition given to them as a group.

Question 43

Hygiene or maintenance factors

Answer 43

Those things that can lead to workers being dissatisfied.

Question 44

Motivated

Answer 44

Being encouraged to do something.

Question 45

Motivators

Answer 45

Those things that can lead to workers being satisfied

Question 46

Self-actualisation

Answer 46

A level on Maslow's hierarchy where an employee realises his or her full potential.

Question 47

Scientific management

Answer 47

A theory that suggests that there is a 'best' way to perform work tasks.

Question 48

Annualised hours contracts

Answer 48

A payment system based on a fixed number of hours each year, but a flexible number of hours each day, week or month.

Question 49

Appraisal

Answer 49

Where the performance of an individual is reviewed against a set of criteria.

Question 50

Blue collar (or manual) workers

Answer 50

Workers who do mainly physical work, like assembly line workers.

Question 51

Bonus

Answer 51

An extra payment made in recognition of the contribution a worker has made to the company.

Question 52

Commission

Answer 52

Payment made, typically for achieving a target, such as a sales target.

Question 53

Fringe benefits

Answer 53

Payment in kind over and above the wage or salary paid, such as a company car or luncheon vouchers.

Question 54

Overtime

Answer 54

Time worked over and above the basic working week.

Question 55

Payment by results

Answer 55

Payment methods that reward workers for the quantity and quality of work they produce.

Question 56

Performance related pay (PRP)

Answer 56

A payment system, typically where workers are paid a higher amount if they achieve certain targets set for them by their employer.

Question 57

Piece rates

Answer 57

A payment system where employees are paid an agreed rate for every item produced.

Question 58

Profit sharing

Answer 58

Where workers are given a share of the profits made by the company which employs them.

Question 59

Salary

Answer 59

Pay, usually of non-manual workers, expressed as a yearly figure but paid monthly.

Question 60

Time rates

Answer 60

Rates of pay based on an amount of time, usually per hour.

Question 61

Wages

Answer 61

Payments made to employees for work done, usually given weekly to manual workers.

Question 62

White collar (or non-manual) workers

Answer 62

Workers who do non-physical work like office workers or teachers.

Question 63

Empowerment

Answer 63

To give official authority to employees to make decisions and control their own activities.

Question 64

Job design

Answer 64

The process of organising the tasks and activities required to perform a job.

Question 65

Job redesign

Answer 65

Changing the tasks and activities of a job, perhaps in an attempt to motivate workers.

Question 66

Job enlargement

Answer 66

Giving an employee more work to do of a similar nature.

Question 67

Job enrichment

Answer 67

An attempt to give employees greater responsibility and recognition by 'vertically' extending their role in the production process.

Question 68

Job rotation

Answer 68

The changing of jobs or tasks from time to time.

Question 69

Multiskilling

Answer 69

The processes of enhancing the skills of employees

Question 70

Teamworking

Answer 70

Employees working in small groups with a common aim..

Question 71

Quality control circles or Quality Circles

Answer 71

Small groups of regular workers in the same area of production which meet regularly to study and solve all types of production problems.