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IGCSE BUSINESS STUDIES. REVISION
QUESTIONS.
"Penetration pricing - CORRECT ANSWER Setting a low price to attract customers to
buy a new product."
"Competitive pricing - CORRECT ANSWER Setting a price similar to that of
competitors' products which are already established in the market."
"Loss leader pricing - CORRECT ANSWER Setting the price of a small number of
products at below costs to attract customers into the outlet hoping that they will buy
other products."
"Cost plus pricing - CORRECT ANSWER Setting price by adding a fixed amount to the
cost of making or buying the product."
"Sales promotion - CORRECT ANSWER Coupons, point of sales display, loyalty
reward scheme, games and competitions."
"E-commerce - CORRECT ANSWER The use of the internet to market and sell goods
and services to customers."
"Retained profits - CORRECT ANSWER Profits remaining in the business after all
expenses, tax and dividends have been paid."
"Overdraft - CORRECT ANSWER An agreement with the bank which allows a
business to spend more money than they have in the account up to an agreed limit. The
loan has to be repaid within 12 months."
"Trade receivable - CORRECT ANSWER The amount owed to the business by its
customers who bought goods on credit."
"Bank loan - CORRECT ANSWER Finance given by a bank which the business will
repay with interest over an agreed period of time."
"Mortgage - CORRECT ANSWER Long term loans use to purchase land and building."
"Debenture - CORRECT ANSWER Bonds issued by companies to raise long term
finance usually at a fixed rate of interest."
"Share issue - CORRECT ANSWER Permanent source of finance available to limited
liability companies."
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"Equity finance - CORRECT ANSWER Permanent source of finance provided by the
owner of the business."
"Micro finance - CORRECT ANSWER Small amount of finance loans to entrepreneurs
in countries where business finance is difficult to obtain."
"Leasing - CORRECT ANSWER The use of a non current asset by paying a fixed
amount per time period for a fixed period of time. Ownership remains with the leasing
company."
"Hire purchase - CORRECT ANSWER The purchase of an asset by paying a fixed
repayment amount per time period over an agreed period. The asset is owned by the
purchasing company at the end of payment term."
"Gross profit - CORRECT ANSWER The difference between revenue and cost of
sales."
"Profit - CORRECT ANSWER The difference between revenue and total costs."
"Total cost - CORRECT ANSWER Costs of sales plus expenses."
"Revenue - CORRECT ANSWER The amount earned for the sale of products."
"Costs of sales - CORRECT ANSWER The cost of purchasing the goods used to make
the products sold."
"Credit sales - CORRECT ANSWER goods sold to customers who will pay for these at
an agreed date in the future."
"Working capital - CORRECT ANSWER Measurement of liquidity of a business."
"Net cashflow - CORRECT ANSWER Cash inflow minus cash outflow"
"Current assets - CORRECT ANSWER Resources that the business owns and expects
to convert into cash before the next balance sheet date."
"Trade payable - CORRECT ANSWER The amount a business owes to its suppliers for
goods bought on credit."
"Owner's equity - CORRECT ANSWER The amount owed by the business to its
owners includes capital and retained profits."
"Shareholder's equity - CORRECT ANSWER Owner's equity."
"Gross profit margin - CORRECT ANSWER gross profit/revenue * 100%"
IGCSE BUSINESS STUDIES. REVISION
QUESTIONS.
"Penetration pricing - CORRECT ANSWER Setting a low price to attract customers to
buy a new product."
"Competitive pricing - CORRECT ANSWER Setting a price similar to that of
competitors' products which are already established in the market."
"Loss leader pricing - CORRECT ANSWER Setting the price of a small number of
products at below costs to attract customers into the outlet hoping that they will buy
other products."
"Cost plus pricing - CORRECT ANSWER Setting price by adding a fixed amount to the
cost of making or buying the product."
"Sales promotion - CORRECT ANSWER Coupons, point of sales display, loyalty
reward scheme, games and competitions."
"E-commerce - CORRECT ANSWER The use of the internet to market and sell goods
and services to customers."
"Retained profits - CORRECT ANSWER Profits remaining in the business after all
expenses, tax and dividends have been paid."
"Overdraft - CORRECT ANSWER An agreement with the bank which allows a
business to spend more money than they have in the account up to an agreed limit. The
loan has to be repaid within 12 months."
"Trade receivable - CORRECT ANSWER The amount owed to the business by its
customers who bought goods on credit."
"Bank loan - CORRECT ANSWER Finance given by a bank which the business will
repay with interest over an agreed period of time."
"Mortgage - CORRECT ANSWER Long term loans use to purchase land and building."
"Debenture - CORRECT ANSWER Bonds issued by companies to raise long term
finance usually at a fixed rate of interest."
"Share issue - CORRECT ANSWER Permanent source of finance available to limited
liability companies."
, 2
"Equity finance - CORRECT ANSWER Permanent source of finance provided by the
owner of the business."
"Micro finance - CORRECT ANSWER Small amount of finance loans to entrepreneurs
in countries where business finance is difficult to obtain."
"Leasing - CORRECT ANSWER The use of a non current asset by paying a fixed
amount per time period for a fixed period of time. Ownership remains with the leasing
company."
"Hire purchase - CORRECT ANSWER The purchase of an asset by paying a fixed
repayment amount per time period over an agreed period. The asset is owned by the
purchasing company at the end of payment term."
"Gross profit - CORRECT ANSWER The difference between revenue and cost of
sales."
"Profit - CORRECT ANSWER The difference between revenue and total costs."
"Total cost - CORRECT ANSWER Costs of sales plus expenses."
"Revenue - CORRECT ANSWER The amount earned for the sale of products."
"Costs of sales - CORRECT ANSWER The cost of purchasing the goods used to make
the products sold."
"Credit sales - CORRECT ANSWER goods sold to customers who will pay for these at
an agreed date in the future."
"Working capital - CORRECT ANSWER Measurement of liquidity of a business."
"Net cashflow - CORRECT ANSWER Cash inflow minus cash outflow"
"Current assets - CORRECT ANSWER Resources that the business owns and expects
to convert into cash before the next balance sheet date."
"Trade payable - CORRECT ANSWER The amount a business owes to its suppliers for
goods bought on credit."
"Owner's equity - CORRECT ANSWER The amount owed by the business to its
owners includes capital and retained profits."
"Shareholder's equity - CORRECT ANSWER Owner's equity."
"Gross profit margin - CORRECT ANSWER gross profit/revenue * 100%"
