Quiz by holly swift, created more than 1 year ago

Overview of the theme 1, topic 1.3

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	Created by holly swift about 6 years ago

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1.3 Putting a business idea into practice

Question 1 of 33

1

What is an aim?

Select one or more of the following:

Aim to achieve things in the business
An overall goal that a business is trying to achieve
Small steps to achieve an overall goal
A process of thought when planning within a business

Explanation

Question 2 of 33

1

Break-even analysis allows firms to find out the minimum amount they need to sell to get by

Select one of the following:

True
False

Explanation

Question 3 of 33

1

Choose 4 non-financial aims a business may have

Select one or more of the following:

Accomplishing a personal challenge
Achieving personal satisfaction
Gaining independence and control
Doing what's right for society
Feeling good on a personal level
to survive within a market

Explanation

Question 4 of 33

1

Choose 5 financial aims a business may have

Select one or more of the following:

To survive
Maximise sales
Increase market share
Achieve financial security
Maximise profit
To gain rewards

Explanation

Question 5 of 33

1

What is an objective?

Select one of the following:

Specific steps to achieve an aim
Selling a certain amount of products
Earning a high profit
overall goals a business wants to achieve

Explanation

Question 6 of 33

1

What is a S.M.A.R.T objective ?

Select one of the following:

Specific. Measurable. Achievable. Relevant. Time Bound
Specific. Measurable. Achievable. Realistic. Time Bound
Suitable. Measurable. Achievable. Relevant. Time Bound
Suitable. Measurable. Achievable. Realistic. Time Bound

Explanation

Question 7 of 33

1

Revenue is the Income earned by a business

Select one of the following:

True
False

Explanation

Question 8 of 33

1

How do you calculate revenue?

Select one of the following:

Revenue = Quantity Sold x Price
Revenue = Price x Fixed Cost
Revenue = Quantity Sold x Variable Cost
Revenue = Quantity Sold x Fixed Cost

Explanation

Question 9 of 33

1

What is a fixed cost?

Select one of the following:

Costs that do not vary with output. They remain the same whether the business produces 100 units or 0 units
Costs you have to pay at the beginning of the business
Costs you pay every quarter
The opposite as a variable cost

Explanation

Question 10 of 33

1

What is a variable cost?

Select one of the following:

Increase with the amount of products produced and sold
The opposite as a fixed cost
Costs that are expensive
Costs that you can pay over a period of 2 months

Explanation

Question 11 of 33

1

total costs = fixed costs + variable costs

Select one of the following:

True
False

Explanation

Question 12 of 33

1

How do you calculate total variable cost?

Select one of the following:

Total Variable Cost = quantity sold x variable cost per unit
Total Variable Cost = quantity sold + total costs
Total Variable Cost = quantity sold / price
Total Variable Cost = price / quantity sold

Explanation

Question 13 of 33

1

How to calculate Interest (on loans) ?

Select one of the following:

Interest (on loans) = (total repayment - borrowed amount / borrowed amount) x 100
Interest (on loans) = total repayment - borrowed amount / borrowed amount
Interest (on loans) = (borrowed amount /total repayment - borrowed amount) x 100
Interest (on loans) = (total repayment + borrowed amount / borrowed amount) x 100

Explanation

Question 14 of 33

1

Profit = Revenue - Costs

Select one of the following:

True
False

Explanation

Question 15 of 33

1

How to calculate break-even point (in units)?

Select one of the following:

Break-even point (units) = fixed cost / selling price - variable cost
Break-even point (units) = variable cost / selling price - fixed cost
Break-even point (units) = total costs / selling price - fixed cost
Break-even point (units) = total costs / selling price - variable cost

Explanation

Question 16 of 33

1

Margin of Safety = Actual sales (or budgeted sales) - Break-even sales

Select one of the following:

True
False

Explanation

Question 17 of 33

1

The firm will use budgeted sales if it's trying to forecast its future margin of safety. The budgeted sales will be the sales the business expect to make.

Select one of the following:

True
False

Explanation

Question 18 of 33

1

One benefit of a firm knowing its margin of safety for a financial year is...

Select one of the following:

It can see how much its output can fall before the business starts running at a loss
It knows the amount of sales it will make
It knows how much revenue to expect
It knows how much revenue is needed to equal total costs

Explanation

Question 19 of 33

1

Net Cash Flow = cash inflows - cash outflows

Select one of the following:

True
False

Explanation

Question 20 of 33

1

What is cash flow ?

Select one of the following:

The process of cash flowing in and out of a business
paying money out of the business
A source of income

Explanation

Question 21 of 33

1

3 examples of cash outflows are...

Select one or more of the following:

Paying wages to staff
Buying equipment
Repayment of loans
Receiving a loan payment

Explanation

Question 22 of 33

1

3 examples of cash inflows are...

Select one or more of the following:

Government grants
Personal funds
Cash sales
Costs of making products

Explanation

Question 23 of 33

1

BEP is when total costs = total revenue

Select one of the following:

True
False

Explanation

Question 24 of 33

1

What is the margin of safety?

Select one or more of the following:

The number of sales above the BEP
The amount of revenue left after costs
Net cash flow

Explanation

Question 25 of 33

1

2 ways of increasing revenue are...

Select one or more of the following:

Increasing selling price
Increasing amount sold by promotions, offers etc.
Make more products

Explanation

Question 26 of 33

1

4 problems with cash flow forecasting?

Select one or more of the following:

Sales prove lower than expected
customers don't pay up on time
cost of production proves higher than expected
certain costs aren't included
It is difficult to read

Explanation

Question 27 of 33

1

5 main causes of cash flow problems?

Select one or more of the following:

Over spending
Getting too big too quick
Too much stock
Giving too much credit to customers
Seasonal demands
variable cost too high
location of store

Explanation

Question 28 of 33

1

5 reasons why cash flow forecasting is important?

Select one or more of the following:

identifies possible shortfalls in cash balance
shows if business can afford to pay suppliers and customers
spot problems with customer payments
shows bank you've planned your finances
external stakeholders (e.g. banks) may require a regular forecast
fun to make
seems to be professional

Explanation

Question 29 of 33

1

Examples of Short-term finance...

Select one or more of the following:

Trade Credit
Overdrafts
Short-term bank loan
retained profit

Explanation

Question 30 of 33

1

Examples of Long-term finance....

Select one or more of the following:

Long-term loans
Personal savings
Share Capital
Crowd Funding
Hire purchase
Trade Credit

Explanation

Question 31 of 33

1

An overdraft allow a business to take more money out of its bank account than it has paid into it

Select one of the following:

True
False

Explanation

Question 32 of 33

1

Chose one advantage and one disadvantage of using overdrafts

Select one or more of the following:

Allow businesses to make payments on time even if they don't have enough cash
Have a high interest rate
If it isn't paid off, the bank can take some of the businesses assets
Have to pay back straight after next payment which will cover amount withdrawn
can withdraw as much cash as you want

Explanation

Question 33 of 33

1

Chose one advantage and one disadvantage of using personal savings as a source of finance.

Select one or more of the following:

Owner could end up loosing own money if the business fails
only a small amount of money
Interest free
Can buy everything straight away and expand quick

Explanation