What is Business

Question 1

mission

Answer 1

An organisation’s aims or long term intentions, its ultimate purpose

Question 2

mission statement

Answer 2

a qualitative statement of an organisations aims that uses language intended to motivate employees and convince customers and suppliers

Question 3

business objectives

Answer 3

goals that must be achieved in order to realise the stated aims of an organisation, department or individual team.

Question 4

corporate objectives

Answer 4

goals of the whole organisation rather than of different elements of the organisation.

Question 5

functional objectives

Answer 5

goals of each of the functional areas of a business (including marketing, finance, operations and human resources)

Question 6

strategy

Answer 6

the medium- to long- term plans through which an organisation intends to achieve its objectives

Question 7

cash flow

Answer 7

the amount of money flowing into and out of a business over a period of time

Question 8

price

Answer 8

the amount paid by a customer to purchase one unit of a product

Question 9

total revenue

Answer 9

the income received from an organisation’s activities

Question 10

fixed costs

Answer 10

costs that do not vary directly with output in the short run

Question 11

variable costs

Answer 11

costs that vary directly with output in the short run

Question 12

total costs

Answer 12

the sum of fixed costs and variable costs

Question 13

profit

Answer 13

the difference between the income of a business and its total costs

Question 14

unincorporated business

Answer 14

there is no distinction in law between the individual owner and the business itself. the identity of the business and the owner is the same. (sole traders and partnerships)

Question 15

incorporated business

Answer 15

this has a legal identity that is separate from the individual owners (Ltd and Plc)

Question 16

unlimited liability

Answer 16

a situation which the owners of a business are liable for all the debts that the business may incur.

Question 17

limited liability

Answer 17

a situation in which the liability of the owners of a business is limited to the fully paid-up value of the share capital

Question 18

sole trader

Answer 18

a business owned by one person. the owner may operate on their own or may employ other people.

Question 19

private limited company

Answer 19

a small- to medium-sized business that is usually run by the family or the small group of individuals who own it

Question 20

public limited company

Answer 20

a business with limited liability, share capital of over £50,000, at least two shareholders, two directors, a qualified company secretary and usually, a wide spread of shareholders

Question 21

ordinary share capital

Answer 21

money given to a company by shareholders in return for a share certificate that gives them part ownership of the company.

Question 22

dividend

Answer 22

a payment made by a company to its shareholders out of profits owned

Question 23

market capitalisation

Answer 23

the value of outstanding shares in a public limited company.

Question 24

shareholder

Answer 24

the owner of a limited company; any person, company or other institution that owns at least one share in a company.

Question 25

share price

Answer 25

the price of a single share in a company; share prices are usually determined by the supply and demand for shares

Question 26

mutual societies

Answer 26

they exist to provide mutual benefits for their members. they are owned and democratically controlled by their members.

Question 27

charity

Answer 27

a charity is an organisation that has exclusively charitable purposes and exists for the public benefit

Question 28

demand

Answer 28

the amount of a product that customers are willing and able to buy at any given price over a period of time

Question 29

interest rates

Answer 29

the cost of borrowing money and the return for lending money

Question 30

demographics

Answer 30

the characteristics of human populations and population groups; it includes analyses of a range of elements including migration trends, birth and death rates