AQA LEVEL BUSINESS PAPER 1
REVISION WITH ANSWERS
Why businesses exist - CORRECT ANSWER-Can make you
money and you can be your own boss
Mission - CORRECT ANSWER-a business aim expressed to
make it seem especially purposeful and motivating
Objectives - CORRECT ANSWER-SMART Specific,
Measurable, Achievable, Realistic, Time-bound
Why businesses set objectives - CORRECT ANSWER-- it is
motivating to have a goal to aim toward
- as a boss you can not make every decision
Profit - CORRECT ANSWER-Revenue - total costs
What are the 5 types of business - CORRECT ANSWER--sole
traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - CORRECT ANSWER-a business that is owned
and operated by one person
Private Limited Company (Ltd) - CORRECT ANSWER-A small
to medium sized company, owned by shareholders who have
limited liability. The company cannot sell its shares to the
general public.
,Private Limited Company Advantages - CORRECT ANSWER--
Limited liability
-Additional capital can be raised by selling shares (not to the
general public)
-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - CORRECT
ANSWER--You have to publish the account information
-You need two share of £1 each
Public limited company (plc) - CORRECT ANSWER-A limited
company with more that £50,000 of share capital. Any member
of the public can buy shares. Public companies must publish
more detailed accounts
Public limited company Advantages - CORRECT ANSWER--
Raising capital through public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better
image
-Shares are more easily transferred so shareholders are
happier
-Separate legal entity to the owner
public limited company Disadvantages - CORRECT ANSWER--
More regulations that could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - CORRECT ANSWER-
Organisations owned by individuals or companies
Public sector organisations - CORRECT ANSWER-Businesses
owned by the government.
,Non-profit organisations - CORRECT ANSWER-Businesses
with a motive other than profit, may be to provide a social
benefit or service to society or to support a cause.
Share capital - CORRECT ANSWER-The total value of capital
raised from shareholders by the issue of shares
Role of Shareholders - CORRECT ANSWER-to raise important
issues with the board directors and raise funds
Why shareholders invest - CORRECT ANSWER--Annual
dividend payments
-A rise in the value of shares
Market capitalisation - CORRECT ANSWER-Number of issued
shares x current share price
Influences on the price of shares - CORRECT ANSWER--The
profit after tax of the company x the value investors place on on
those earnings
Significance of share price changes - CORRECT ANSWER-
High = cheap and easy to obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses -
CORRECT ANSWER--Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - CORRECT ANSWER--The number of
competitors in a particular market
-The intensity of competitiveness
, -Total market available
-The rate at which the market is growing
Competition - CORRECT ANSWER-The tighter the economic
and market conditions, the greater the competitive pressures
tend to be
Factors that effect household incomes - CORRECT ANSWER--
Changes in the real income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - CORRECT ANSWER-If interest
rates go up, businesses and individuals spend less. If interest
rates go down, businesses and individuals spend more.
Demographic factors - CORRECT ANSWER--Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - CORRECT ANSWER-
Concern for green issues and ethical issues involved with
business.
What do managers do - CORRECT ANSWER-Set objectives,
organize, motivate and communicate, measure, develop people
What are the leadership styles - CORRECT ANSWER--
Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - CORRECT ANSWER-Managers who
centralise power and tell employees what to do. They tend to
use one-way, top-down communication.
REVISION WITH ANSWERS
Why businesses exist - CORRECT ANSWER-Can make you
money and you can be your own boss
Mission - CORRECT ANSWER-a business aim expressed to
make it seem especially purposeful and motivating
Objectives - CORRECT ANSWER-SMART Specific,
Measurable, Achievable, Realistic, Time-bound
Why businesses set objectives - CORRECT ANSWER-- it is
motivating to have a goal to aim toward
- as a boss you can not make every decision
Profit - CORRECT ANSWER-Revenue - total costs
What are the 5 types of business - CORRECT ANSWER--sole
traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - CORRECT ANSWER-a business that is owned
and operated by one person
Private Limited Company (Ltd) - CORRECT ANSWER-A small
to medium sized company, owned by shareholders who have
limited liability. The company cannot sell its shares to the
general public.
,Private Limited Company Advantages - CORRECT ANSWER--
Limited liability
-Additional capital can be raised by selling shares (not to the
general public)
-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - CORRECT
ANSWER--You have to publish the account information
-You need two share of £1 each
Public limited company (plc) - CORRECT ANSWER-A limited
company with more that £50,000 of share capital. Any member
of the public can buy shares. Public companies must publish
more detailed accounts
Public limited company Advantages - CORRECT ANSWER--
Raising capital through public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better
image
-Shares are more easily transferred so shareholders are
happier
-Separate legal entity to the owner
public limited company Disadvantages - CORRECT ANSWER--
More regulations that could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - CORRECT ANSWER-
Organisations owned by individuals or companies
Public sector organisations - CORRECT ANSWER-Businesses
owned by the government.
,Non-profit organisations - CORRECT ANSWER-Businesses
with a motive other than profit, may be to provide a social
benefit or service to society or to support a cause.
Share capital - CORRECT ANSWER-The total value of capital
raised from shareholders by the issue of shares
Role of Shareholders - CORRECT ANSWER-to raise important
issues with the board directors and raise funds
Why shareholders invest - CORRECT ANSWER--Annual
dividend payments
-A rise in the value of shares
Market capitalisation - CORRECT ANSWER-Number of issued
shares x current share price
Influences on the price of shares - CORRECT ANSWER--The
profit after tax of the company x the value investors place on on
those earnings
Significance of share price changes - CORRECT ANSWER-
High = cheap and easy to obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses -
CORRECT ANSWER--Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - CORRECT ANSWER--The number of
competitors in a particular market
-The intensity of competitiveness
, -Total market available
-The rate at which the market is growing
Competition - CORRECT ANSWER-The tighter the economic
and market conditions, the greater the competitive pressures
tend to be
Factors that effect household incomes - CORRECT ANSWER--
Changes in the real income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - CORRECT ANSWER-If interest
rates go up, businesses and individuals spend less. If interest
rates go down, businesses and individuals spend more.
Demographic factors - CORRECT ANSWER--Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - CORRECT ANSWER-
Concern for green issues and ethical issues involved with
business.
What do managers do - CORRECT ANSWER-Set objectives,
organize, motivate and communicate, measure, develop people
What are the leadership styles - CORRECT ANSWER--
Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - CORRECT ANSWER-Managers who
centralise power and tell employees what to do. They tend to
use one-way, top-down communication.
