Mock 1 Prep

Question 1

Define primary sector

Answer 1

A sector in the economy making direct use of natural resources. Ex: fishing, agriculture and mining

Question 2

Define secondary sector

Answer 2

A sector producing manufactured goods, converting raw materials into components (Ex: plastics from oil) or assembly of a product (ex: building houses, bridges, etc.)

Question 3

Define tertiary sector

Answer 3

A sector providing services to consumers and other businesses (ex; insurance, transport, etc)

Question 4

Define mission statement

Answer 4

Brief statements of the purpose of a company to guide the actions of an organization

Question 5

What is a mission statement used for?

Answer 5

• To spell out the overall goals of an organization

* To provide a sense of direction to aid in decision making for all levels of management.

Question 6

Define vision statement

Answer 6

Defines where an organization wishes to see itself in the future, sometimes optimistically

Question 7

Define batch production

Answer 7

Production of a set of identical products in large batches.

Question 8

How is batch production done?

Answer 8

Work on each batch is finished completely before production switches to another batch.

Used when product demand is steady and frequent.

Question 9

Define cell production

Answer 9

Workers are organized into independent “cells”, each team comprised of multi skilled staff with responsibility and autonomy for completing a whole unit of work in the production process

Question 10

Define flow production

Answer 10

Uses continuous and progressive processes, carried out in sequence. One task completed at a time before the next starts

Question 11

Define job production

Answer 11

Involves the manufacturing of a unique/one-off job. Can be completed by a single person (e.g., a tailor) or a team (e.g., architects/engineers).

Question 12

Define dividends

Answer 12

Payments a business pays to its shareholders on a proportional basis (%) of the company’s profit (a fixed amount for each share)

Question 13

Define share capital

Answer 13

Money invested by shareholders

Question 14

Define debtors

Answer 14

Person that owes a company/individual money

Question 15

Define creditors

Answer 15

A person/company to whom money is owed

Question 16

Define joint venture

Answer 16

2 or more companies investing in a shared business project. An LT business activity.

Question 17

Define strategic alliance

Answer 17

Similar to joint ventures, except they don’t form a new business with a separate legal identity.

Question 18

Define franchising

Answer 18

A business allowing others to trade under it’s name in return for a fee and royalty payments based on a predetermined share of the sales revenues.

Question 19

Define franchisee

Answer 19

One who purchases a franchise

Question 20

Define franchisor

Answer 20

Company owner of a franchise

Question 21

Define Profit and Loss

Answer 21

Shows the Sales Revenue, Costs and Level of Profit of a company for a given period of time, usually a year.

Question 22

Define Balance Sheet

Answer 22

Shows what an organization owns and owes to others. indicates the business’s level of working capital and its liquidity, providing insight into the business’s ability to survive in the ST.

Question 23

Define Cash Flow Forecast

Answer 23

Estimates timing and accounts of cash inflows and outflows over a specific time period (usually a year)

Question 24

Define Pay Back Period

Answer 24

time needed for an investment project to earn enough profit to repay the initial cost of the investment.

Question 25

Define Average Rate of Return

Answer 25

Calculates the average profit on an investment project as a % of the amount invested

Question 26

Define Fish Bone/Ishikawa Diagram

Answer 26

a visualization tool for categorizing the potential causes of a problem in order to identify its root causes.

Question 27

What do the 6M’s in management theory include?

Answer 27

Money, Machine, Manpower, Measurement, Methods, Mothernature

Question 28

Define Break Even

Answer 28

A point in business venture where the profits/revenue are equal to the costs.

Question 29

Define Decision Trees

Answer 29

support tool, uses a model of decisions and their possible consequences. A branching method to illustrate every possible outcome of the decision.

Question 30

Define Force Field Analysis

Answer 30

• Helps make a decision by analyzing the forces for and against a change (driving and restraining).
• Helps communicate the reasoning behind a decision.

Question 31

Define Ratio Analysis

Answer 31

a form of financial statement analysis used to obtain a quick indication of a firm’s financial performance in several key areas.

Question 32

What are the key areas of ration analysis

Answer 32

profitability, liquidity, activity, debt, and market.

Question 33

What does a Gantt chart show?

Answer 33

the amount of work done or production completed in certain periods of time in relation to the amount planning for those periods.

Question 34

Define Appraisal

Answer 34

a meeting between a worker and a manager reviewing key aspects of the worker’s performance. Including objectives and development. There are difference systems of appraisals; such as peer appraisal and 360 degrees appraisal.

Question 35

What are the different systems of appraisals?

Answer 35

• General appraisal
• 360-degree appraisal
• Employee self-assessment
• Manager performance appraisal
• Psychological appraisal.

Question 36

Define Dismissal

Answer 36

when an employer terminates the contract of an employee. Also known as firing or lay-off.

Question 37

Define Cost Centre

Answer 37

Subunit of a company that is responsible only for its costs.

Question 38

Define Profit Centre

Answer 38

a subunit of a company that is responsible for revenues and costs.

Question 39

Define Quaternary Sector

Answer 39

industries providing information services, such as computing, ICT and R&D