AICE Business AS Level Vocabulary & Practice Questions
Updated for 2026-2027 Syllabus | Cambridge
Assessment International Education ALREADY GRADED
A+
SECTION 1: KEY VOCABULARY (Alphabetical by Unit)
UNIT 1: Business and Its Environment
Term Definition
The difference between the selling price of a product and the cost of bought-in materi
Added value
and components
A written document describing a business's future strategy, financial forecasts, and
Business plan
operational plans
Man-made resources used to produce other goods and services (machinery, buildings,
Capital
equipment)
Capital intensive Production processes that use a high proportion of capital relative to labor
Customer An individual or organization that buys goods or services from a business
Demographics Statistical data about population characteristics (age, gender, income, ethnicity)
Breaking down a production process into smaller tasks, with each worker specializing i
Division of labor
one task
Cost advantages gained when production increases, leading to lower average costs pe
Economies of scale
unit
,Term Definition
The ability to identify business opportunities and combine resources to produce
Enterprise
goods/services
Entrepreneur An individual who takes financial risk to start and manage a business
Factors of
Land, labor, capital, and enterprise—inputs used to produce goods and services
production
Fixed costs Costs that do not change with the level of output (rent, salaries, insurance)
Goods Physical, tangible products that can be stored and consumed later
Labour Human effort (physical and mental) used in production
Labour intensive Production processes that use a high proportion of labor relative to capital
Land Natural resources used in production (minerals, forests, water, agricultural land)
The legal form of a business (sole trader, partnership, private limited company, public
Legal structure
limited company)
Shareholders are only responsible for the debts of the business up to the value of thei
Limited liability
investment
Mission statement A formal statement expressing the business's purpose, values, and long-term objective
Specific, measurable goals a business aims to achieve (profit, growth, market share,
Objectives
survival)
Opportunity cost The value of the next best alternative foregone when making a decision
, Term Definition
Private sector Businesses owned and controlled by private individuals and organizations
Public sector Organizations owned and controlled by the government (schools, hospitals, police)
Primary sector Businesses involved in extracting or harvesting natural resources (farming, mining, fish
Secondary sector Businesses that manufacture goods by processing raw materials (factories, constructio
Stakeholder Any individual or group with an interest in the activities of a business
Stakeholder conflict When the objectives of different stakeholder groups are incompatible
Startup A newly established business, typically with innovative products or services
Businesses that provide services to consumers and other businesses (retail, banking,
Tertiary sector
transport)
Unlimited liability Business owners are personally responsible for all debts of the business
UNIT 2: Business Structure, Size, and Growth
Term Definition
Amalgamation Combining two or more businesses to form a single new entity
Appropriation of profits How a company distributes its net profit (dividends, retained earnings, reser
Legal document outlining the internal rules and management structure of a
Articles of Association
company
Updated for 2026-2027 Syllabus | Cambridge
Assessment International Education ALREADY GRADED
A+
SECTION 1: KEY VOCABULARY (Alphabetical by Unit)
UNIT 1: Business and Its Environment
Term Definition
The difference between the selling price of a product and the cost of bought-in materi
Added value
and components
A written document describing a business's future strategy, financial forecasts, and
Business plan
operational plans
Man-made resources used to produce other goods and services (machinery, buildings,
Capital
equipment)
Capital intensive Production processes that use a high proportion of capital relative to labor
Customer An individual or organization that buys goods or services from a business
Demographics Statistical data about population characteristics (age, gender, income, ethnicity)
Breaking down a production process into smaller tasks, with each worker specializing i
Division of labor
one task
Cost advantages gained when production increases, leading to lower average costs pe
Economies of scale
unit
,Term Definition
The ability to identify business opportunities and combine resources to produce
Enterprise
goods/services
Entrepreneur An individual who takes financial risk to start and manage a business
Factors of
Land, labor, capital, and enterprise—inputs used to produce goods and services
production
Fixed costs Costs that do not change with the level of output (rent, salaries, insurance)
Goods Physical, tangible products that can be stored and consumed later
Labour Human effort (physical and mental) used in production
Labour intensive Production processes that use a high proportion of labor relative to capital
Land Natural resources used in production (minerals, forests, water, agricultural land)
The legal form of a business (sole trader, partnership, private limited company, public
Legal structure
limited company)
Shareholders are only responsible for the debts of the business up to the value of thei
Limited liability
investment
Mission statement A formal statement expressing the business's purpose, values, and long-term objective
Specific, measurable goals a business aims to achieve (profit, growth, market share,
Objectives
survival)
Opportunity cost The value of the next best alternative foregone when making a decision
, Term Definition
Private sector Businesses owned and controlled by private individuals and organizations
Public sector Organizations owned and controlled by the government (schools, hospitals, police)
Primary sector Businesses involved in extracting or harvesting natural resources (farming, mining, fish
Secondary sector Businesses that manufacture goods by processing raw materials (factories, constructio
Stakeholder Any individual or group with an interest in the activities of a business
Stakeholder conflict When the objectives of different stakeholder groups are incompatible
Startup A newly established business, typically with innovative products or services
Businesses that provide services to consumers and other businesses (retail, banking,
Tertiary sector
transport)
Unlimited liability Business owners are personally responsible for all debts of the business
UNIT 2: Business Structure, Size, and Growth
Term Definition
Amalgamation Combining two or more businesses to form a single new entity
Appropriation of profits How a company distributes its net profit (dividends, retained earnings, reser
Legal document outlining the internal rules and management structure of a
Articles of Association
company
