Theme 1 Summary test 2 & 3

Which of the following is an example of a change in UK legislation?

• Developments in social media

• An increase in unemployment

• The introduction of the national living wage

• Consumer attitudes towards recycling

Which of the following is a business that has a competitor weakness based on customer service?

• A supermarket charges higher prices than rivals for the same product

• A fast food outlet fails to serve customers within its 3 minute target

• A greengrocer sells bruised and damaged fruit and vegetables

• An independent jeweller offers limited product choice for customers

A business has monthly fixed costs of £1,500 and the variable costs per unit is £4.00. Each unit is sold for £5.50. What is the margin of safety if 1,850 units are sold per month?

• 850

• 1,000

• 1,500

• 1,850

An entrepreneur wishes to feel financially secure when starting a business. Which of the following best describes the term, financial security?

• To keep the business trading

• To offer a large product range to customers

• To be confident about the business’s financial situation

• The ability to make all key decisions in the business

Which of the following is an implication for business owner(s) of unlimited liability?

• Liability is limited to the value of the owner’s investment

• The owner is not personally liable for the debts of the business

• The owner can only lose the money invested in the business

• The owner is personally liable for any business debts

In which section of the business plan would you expect to find a prediction of the future cash inflows and cash outflows of the business?

• Sources of finance

• Forecast revenue, costs and profit

• Cash-flow forecast

• Break even analysis

In January, a business had cash inflows of £51,450, cash outflows of £61,200. The net cash flow for the month of January was:

• £9,750

• (£9,750)

• £112,650

• (£112,650)

The table below shows the annual sales and market share for Flynn’s Florist, as well as the total market sales for the market in which the business operates.

Using the table, which of the following best describes the trend in total market sales and Flynn’s Florist market share from last year to this year:

• Total market sales decreased and Flynn’s market share increased

• Total market sales increased and Flynn’s market share decreased

• Total market sales decreased and Flynn’s market share decreased

• Total market sales increased and Flynn’s market share increased

Which of the following best describes the term, overdraft?

• The amount of time customers are allowed, by suppliers, to pay for any goods bought

• A long term loan used specifically to buy land and buildings

• An agreement with the bank to overspend on a bank account up to an agreed limit, repayable with interest

• The payment made each month to a bank in return for borrowing money

Which of the following is true for a UK exporter of goods to the USA when the pound becomes weaker?

• Exports become cheaper

• Profits are likely to decrease

• Export sales are likely to decrease

• Exports become more expensive