MOD 6- sole traders

Question 1

when a business records all of the transactions that happen in the business

Answer 1

bookkeeping

Question 2

language and rules used by a business to understand the information captured by bookkeeping

Answer 2

accounting

Question 3

what is a sole trader?

Answer 3

a business with only one owner

Question 4

name 3 advantages of being a sole trader

Answer 4

1 owner has full control of the business

2 owner keeps the profit

3 does not financial statements

Question 5

name 3 disadvantages of being a sole trader

Answer 5

1 is responsible for the business [a lot of stressful work]

2 its more difficult to borrow money

3 usually a small business with little profit

Question 6

name the three types of businesses

Answer 6

1 manufacturing
2 trading
3 service

Question 7

what is a manufacturing business?

Answer 7

makes products to sell to other businesses

Question 8

what is a trading business ?

Answer 8

buys products to sell them

Question 9

what is a service business ?

Answer 9

provides services to customers for pay

Question 10

what is capital ?

Answer 10

capital is the money and equipment used to start a business

Question 11

owners equity ?

Answer 11

value of assets the owner really owns

Question 12

what are drawings ?

Answer 12

when a owner takes out money out of the business for personal use

Question 13

what is income ?

Answer 13

the money a business receives for services or products sold

Question 14

what are expenses ?

Answer 14

money paid to run the business

Question 15

what is profit ?

Answer 15

when the income is more than the expenses

Question 16

what are losses ?

Answer 16

when the income is less than the expenses