Unit 2 Past Exam Questions 3

Identify one start-up cost for a business.

• Salaries paid to staff in the business

• Insurance costs for the business

• Purchase of new machinery

• Payment of telephone bills

Identify one source of revenue.

• Sales of products to customers

• Rent paid for shop premises

• Money paid to suppliers

• Purchase of new stock

What is meant by the term overheads?

• Every day running costs for a business

• Revenue a business will receive

Deidre owns a sandwich shop. On average she sells 1748 sandwiches each month. She sells her sandwiches for an average of £3.75.

Calculate Deidre’s monthly revenue.

• Number of sales x price per unit = R

  1748 x 3.75 = 6555

• Number of sales x price per unit = R

  1748 x 3.75 = 6550

Identify what a business will do when costs are higher than revenue.

• Make a profit

• Break even

• Make a loss

• Become bankrupt

Samia owns a shop. Select one current asset that Samia might have.

• Shelving and storage used within he shop

• Money that Samia has used to set up the shop

• Businesses that Samia owes money to for her stock

• Customers who owe the shop money for goods bought

Ravindra owns a successful cafe. He wants to expand his product range. Ravindra hopes this will increase his revenue. Which two are other ways he could spend money to increase revenue.

• Carry out more marketing.

• Expand his premises.

• Change suppliers.

Select the correct labels.

• A = Total cost

  B = Margin of safety

• A = Revenue

  B = Margin of safety

• A = Total cost

  B = Area of loss

What is meant by the term gross profit?

• Gross profit is the difference between sales revenue and the cost of sales.

• Gross profit is the difference between sales revenue and total costs.

Damon runs a card shop. Damon has an overdraft for his card shop. An overdraft is an example of an item in which section of a statement of financial position (balance sheet)?

• Long-term liability

• Current asset

• Current liability

• Fixed asset