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Knowledge Questions for year 11 Business.

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Introduction

Year 11 Knowledge questions Q1 Explain the following and give 2 examples Method Explain it 3 Examples Start up costs A one of cost. Market research, a van and fixtures and fittings. Running costs A day to day cost Wages, rent , electricity Fixed costs A cost that doesn't change according to output. Rent, wages, bills Variable costs A cost that changes or varies according to output. Ingredients, stock, packaging Q2.What is Output? The number sold or made. Q3 Flow of financial documents to make a business purchase: Method When is it used 2 Advantages 2 Disadvantages Cash Used in every day transactions. Instant payment, Not in debt. Easily counterfeited. Lost or stole. Cheque To send through the post. Cancel it if robbed, can be sent through the post. Takes 5 days for money to leave your account. Credit card When you don't have money you can still buy things. Can use it any time, buy things without money. Not your money, pay back with interest Debit card You don't need the money in your bank. Don't have to payback, your money May not have money. Lose it. Direct debit Used to pay monthly bills. Comes straight out of your bank. Might not have enough money. It's done by computer could make a mistake. ...read more.

Middle

Profits Money saved from net profit. (internal). Not in debt No interest to pay, it's their money. May not have any, may not have enough, may be needed elsewhere Loan This is money borrowed from a bank (external). Get the full amount, can repay in instalments. Have to pay it back with interest. Hire Purchase Hire purchase is used to buy goods through a monthly payment. (External). Get the full amount, can repay in instalments. Have to pay it back with a high rate of interest Leasing Some businesses pay to lease goods rather than buy them (external). Pay in instalments instead of the entire amount. Don't have to pay for repairs Don't own the item. Expensive repayments. Government Grant Money from the government, generally tied to an agreement (external). Not in debt, don't have to pay it back. May not get full amount. Takes a long time to apply for one. Sell shares Selling part of your company to someone else. Your not in debt. Could lose some control, lose profits. Sell assets This is used for raising money if a business is struggling (internal). Money for something you don't use, not in debt May need in future, may not get a good price Venture Capital This is a company that will invest in a business idea at a high price Receive finance for a high risk product, Receive good advice from experts Lose some control of part of your business, high interest. ...read more.

Conclusion

Which document is sent once a month? Statement of account d) Which document contains details of price, discount and VAT? Invoice e) What document is sent with a cheque? Remittance advice slip f) Why are there three copies of a delivery note (who keeps them)? There are 3 copies of a delivery note so that there is prove of delivery, so the buyer can have 1 the seller can have 1 and the delivery company. g) Give two reasons why a credit note is sent? Damaged or faulty (2) h) Which 3 documents should be checked before payment is made and why? Invoice, goods received note and purchase order. (3) 13) Explain two advantages and two disadvantages of a company switching from a manual to a computerised accounts system? Advantages: Easy to use takes up less storage space. (2) Disadvantages: It might break, Need staff training. (2) Profit and Loss 14) Draw a profit and loss account based on the following information? Rent 10,000 Sales Revenue 120,000 Raw Materials 30,000 Insurance 3,000 Wages 41,000 Advertising 4,000 Stock purchase 37,000 Misc Expenses 3,000 Utility bills 1,000 Car servicing 2,000 Sales 120,000 Cost of goods 67,000 Gross profit 53,000 Less expenses Rent 10,000 Wages 41,000 Utility bills 1,000 Insurance 3,000 Advertising 4,000 Misc expenses 3,000 Car servicing 2,000 Total expenses 64,000 Net profit (�11,000) 15) What is a debtor? A person or business that owes you money What is a creditor? A person or business that you owe money to ...read more.

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