Business Management and Accounting Exam

What is a business? - answer-establishment where money is traded for a good or service Good - answer-tangible / physical item that can be stored Service - answer-an intangible item that cannot be stored Sole Trader - answer-- owned and operated by one person - owner has total responsibility - owner has sole right to all profits Sole Trader Advantages - answer-- simple and inexpensive to start up - owner keeps all profit - owner makes important decisions on their own Sole Trader Disadvantages - answer-- unlimited liability for owner - relies on one person's knowledge and skills - business ends when owner dies Partnership - answer-- owned by two or more people - decision making, profits, losses, duties and responsibilities can be split amongst each partner Partnership Advantages - answer-- risk and workload shared between partners - more capital to start up business Partnership Disadvantages - answer-- business could be threatened by a partner leaving - potential for conflicts and personality clashes Corporation / Company - answer-- owned by many shareholders - more complex because of many more owners involved - can be private or public companies Private Company - answer-more restrictive and has private shareholders Public Company - answer-listed on the ASX for anyone to become a shareholder Business Objectives - answer-1. making a profit 2. to increase a market share 3. to fulfil a market need 4. meeting a social need 5. to improve efficiency 6. to improve effectiveness Making a Profit - answer-a business aims to either increase revenue or decrease expenses in order to make more profit To Increase a Market Share - answer-percentage of sales in a market that's owned by a business, in comparison to competitors To Fulfil a Market Need - answer-different types of customers have different needs and wants, and whole new businesses can be created to fill the gaps in the market Meeting a Social Need - answer-a social need is focused on the wider community, and how a business can improve the quality of life for them Improve Efficiency - answer-how productively a business uses its resources - are they getting the most out of their money, time, effort, employees, and materials? Improve Effectiveness - answer-effectiveness is whether or not a business achieves its stated objectives Innovation - answer-a completely new idea that hasn't existed or brings a new change to an existing product or concept Entrepreneur - answer-someone that creates a business venture based on a new idea or service Marketing - answer-the process of implementing strategies to price, promote, and distribute products to current and potential customers 7 P's of Marketing - answer-1. product 2. price 3. place 4. promotion 5. people 6. process 7. physical evidence