Term 1 & 2

Question 1

finances def.

Answer 1

money or funds

Question 2

capital def.

Answer 2

what the owner puts into their business

Question 3

assets def.

Answer 3

possessions that are used to run a business

Question 4

assets example

Answer 4

• land/buildings - property occupied by business
• equipment - e.g. computers, furniture …
• vehicles - cars, delivery trucks, motor bikes
• money in the bank - cash

Question 5

liabilities def.

Answer 5

the debts of a business

Question 6

loan def.

Answer 6

money borrowed from a financial institution such as a bank

Question 7

suppliers def.

Answer 7

businesses that a business buys items from

Question 8

credit def.

Answer 8

buy now and pay later

Question 9

interest def.

Answer 9

money earned on money you save in a bank

Question 10

goods def.

Answer 10

products that a business sells

Question 11

services def.

Answer 11

work done for the benefit of another

Question 12

income def.

Answer 12

money earned by a business

Question 13

expenses def.

Answer 13

the running cost of a business

Question 14

income terms

Answer 14

• Sales - income from selling goods
• Current income - income from providing services
• rent income
• Interest income
• Commission income

Question 15

Expenses terms

Answer 15

• water & electricity
• stationery
• products
• wages
• advertising

Question 16

profit def.

Answer 16

the amount by which income is greater than expenditure

Question 17

loss def.

Answer 17

the amount by which expenditure is greater than income

Question 18

deposit def.

Answer 18

put money into a bank account

Question 19

withdrawal def.

Answer 19

take money out of a bank account

Question 20

current account def.

Answer 20

a bank account used for daily transactions

Question 21

budget def.

Answer 21

a money plan to make sure you do not spend more than you earn

Question 22

difference between surplus and deficit

Answer 22

surplus is the money you have left over after you have paid all expenses whereas deficit is money you still need to pay when expenses are higher than income

Question 23

entrepreneur def.

Answer 23

a person with skills who starts their own business

Question 24

Why people become entrepreneurs:

Answer 24

• to work for themselves and make their own decisions
• they are unemployed and want to earn an income to support their families
• starting your own business is one way of earning money and it creates jobs

Question 25

characteristics of successful entrepreneurs:

Answer 25

• have a vision of what they want to achieve
• have confidence in their ability to succeed
• they take risks
• like to have control and be in charge
• good at planning and organising
• have high levels of energy and commitment
• are flexible and able to adapt quickly to change
• have ability to identify a business opportunity and see the potential in new business ideas
• have exceptional leadership and management skills

Question 26

Entrepreneurial actions:

Answer 26

• buy
• produce
• sell
• make a profit

Question 27

producing def.

Answer 27

the act of making a product by transforming raw materials into goods

Question 28

selling def.

Answer 28

the act of convincing customers to by the goods and services

Question 29

raw materials def.

Answer 29

things that are used to make other goods

Question 30

inputs def.

Answer 30

the specifications and materials in the production process

Question 31

make a profit def.

Answer 31

the act of ensuring that income is greater than expense

Question 32

financial records def.

Answer 32

a list of income and expenses of a business

Question 33

Stages of production:

Answer 33

primary - natural resources are extracted from the Earth
secondary - products are manufactured from raw materials
tertiary - provide service or advertising and selling

Question 34

Inputs/factors of production

Answer 34

• natural resources (land)
• labour
• capital
• entrepreneurs

Question 35

labour def.

Answer 35

the physical and mental effort that people provide to produce goods

Question 36

outputs of production

Answer 36

• goods

- services

Question 37

economic growth def.

Answer 37

an increase in the level of economic output over time

Question 38

strategies to stimulate economic growth:

Answer 38

• promoting entrepreneurship and encouraging new small businesses
• encouraging existing businesses to expand and increase their production
• improving the level of productivity produce more goods and services
• modifying production techniques
• encouraging investors from other countries to invest in SA
• ensuring better management of resources
• improving business management practices

Question 39

results of economic growth:

Answer 39

• there are more goods and services for consumers to choose from
• employment levels rise and unemployment levels drop
• the level of income increases because people profit from the sale of more goods
• the average standard of living improves because more people have jobs and more money is circulating in the economy

Question 40

productivity def.

Answer 40

how efficiently resources are being used to generate products and services