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WorksheetsCHRISTMAS PAPER 1 REVISION
Total questions: 100
Worksheet time: 55mins
What is short-term finance mainly used for?
Buying new buildings
Maintaining positive cash flow
Funding long-term expansion
Paying shareholder dividends
Which source of short-term finance allows a business to borrow only when needed?
Venture capital
Retained profit
Overdraft
Share capital
Which is a common disadvantage of overdrafts?
Fixed interest rates
High interest charges
No repayment required
Loss of ownership
Trade credit allows a business to:
Borrow money from customers
Buy now and pay later
Sell shares to suppliers
Avoid paying for stock altogether
Which of the following is a typical trade credit term?
Interest-free lifetime payments
30-90 days to pay suppliers
Unlimited credit use
Payment only once per year
Which source of finance involves the entrepreneur using their own money?
Venture capital
Personal savings
Share capital
Bank loan
What do venture capitalists usually expect in return for investment?
A. A guaranteed refund
B. No involvement in the business
C. A share of profits and influence
D. Total ownership of the business
What is a key disadvantage of venture capital?
It is interest-free
It reduces the founder’s control
It requires no risk from the investor
It does not provide guidance
What is share capital?
Money raised by selling assets
Money raised from bank borrowing
Money raised through selling shares
Money borrowed from suppliers
Which is an advantage of share capital?
Shareholders can demand refunds
No dividends must be paid in a poor year
It guarantees profit growth
It increases founder control
Which is a disadvantage of share capital?
Shareholders cannot sell their shares
It reduces the risk of takeover
It dilutes founder control
Shareholders cannot vote
What is a bank loan?
A. A one-off grant that does not require repayment
B. Money lent with fixed repayments over time
C. Money borrowed from customers
D. A type of share sold to investors
Why might a bank require collateral for a loan?
To reduce the bank’s level of risk
To increase the loan amount available
To stop the business from using retained profit
To guarantee shareholder approval
Which source of finance does not incur interest?
Bank loan
Overdraft
Retained profit
Trade credit
Why might retained profit be considered desirable?
It always provides unlimited funds
It requires no repayments or interest
It allows shareholders to control the business
It guarantees long-term stability
What is crowdfunding?
A. A government grant for large firms only
B. A high-interest loan from banks
C. Raising money from many small investors online
D. Selling shares on the stock market
Which is an advantage of crowdfunding?
It guarantees funding
It acts as market research
It requires no public interest
It involves no time pressure
Which is a disadvantage of crowdfunding?
All ideas easily reach funding targets
It cannot be used by start-ups
Investors demand full control of the business
Only appealing ideas attract enough investment
Which long-term source of finance is most likely to slow down decision-making?
Overdraft
Personal savings
Share capital
Trade credit
Which source of finance is most suitable for covering sudden shortfalls in cash?
Overdraft
Venture capital
Share capital
Crowdfunding
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. Which of the following best describes a dynamic business environment?
One that stays the same over time
One that is constantly changing and evolving
One that focuses only on existing customers
One that avoids innovation
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. What does innovation mean in business?
Copying competitors’ products
Creating something new or improving existing products
Avoiding risk
Hiring more staff
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. Which of these best represents a change in consumer needs?
A) People using more online shopping during holidays
B) A factory closing for maintenance
C) A business increasing its prices
D) Employees working overtime
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. Why do businesses need to adapt to changes in technology?
To avoid paying tax
To stay competitive and meet customer expectations
To reduce product quality
To keep things traditional
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. Which of these is an example of a new business opportunity created by technology?
A) A traditional bakery opening on the high street
B) A small business selling products through an online store
C) A company reducing its advertising budget
D) A business closing due to competition
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. What does e-commerce mean?
Using technology to advertise
Buying and selling goods or services online
Promoting products through TV
Setting up physical shops
This topic explores how and why business ideas evolve to meet changing customer needs, technology, and markets. Which of the following is an example of adapting to consumer trends?
A business changes its packaging to be biodegradable. This shows:
Innovation
Meeting ethical and environmental expectations
Poor customer service
Cost cutting
Which of these is NOT a reason for a business to adapt?
Changes in technology
Changes in fashion
Changes in consumer income
Desire to remain the same
Which statement about risk and reward is correct?
A) Businesses can earn profits without taking any risks
B) Taking risks can lead to both failure and success
C) Businesses should always avoid risk
D) Risk guarantees success
Which is an example of how a business can add value?
Increasing price without improving the product
Improving packaging and design
Reducing product quality
Ignoring market research
Which of the following is an example of a business adapting to social change?
A) Adding more meat options to menus
B) Launching an app to support mental wellbeing
C) Ignoring diversity in advertising
D) Refusing to update working practices
What can happen if a business fails to adapt to change?
It gains new customers
It remains successful forever
It loses competitiveness and customers
It automatically increases sales
What is a competitive advantage?
When a business has no rivals
When a business can outperform rivals through cost, quality, or innovation
When all businesses charge the same prices
When a business avoids competition
Which of the following is an example of technological advancement?
Using hand-written records
Using AI chatbots for customer support
Reducing internet use
Employing fewer workers
Which factor is most likely to cause a change in consumer spending habits?
Stable prices
Rise in average income
Fewer competitors
Business stability
Which of these best defines a small business?
One with no profit motive
One run by the government
One owned and managed by a few individuals
One that operates globally
Why might globalisation create opportunities for small businesses?
It increases trade barriers
It limits international communication
It opens new markets and customer bases
It reduces online presence
What is an example of a new market trend?
Decline in social media usage
Growing demand for eco-friendly products
Falling popularity of smartphones
Decrease in online learning
Which of the following best describes a product becoming obsolete?
It becomes more fashionable
It’s replaced by something newer or better
It becomes cheaper
It’s advertised more heavily
What is meant by business risk?
The chance of losing money or failing
The guarantee of profit
A reward for taking a chance
An insurance policy
Which of the following is a financial risk?
Competitors copying your idea
Losing personal savings invested in the business
Staff being late for work
Customers leaving positive reviews
Why might an entrepreneur take a risk?
To avoid decision making
To gain financial reward or independence
To lose money quickly
To reduce responsibility
What does the term “reward” refer to in business?
The salary employees receive
The benefit gained from taking a risk
The amount of tax paid
The number of competitors
Which of these is an example of a non-financial reward?
Profit
Independence and personal satisfaction
Higher market share
Return on investment
Which of the following is NOT a common risk of starting a business?
A) Business failure
B) Poor cash flow
C) High demand for the product
D) Competition
Why might poor cash flow cause a business to fail?
It leads to surplus savings
It makes it difficult to pay bills or suppliers
It increases profits
It attracts more investors
What is an example of a personal risk for an entrepreneur?
Losing reputation or work-life balance
Having loyal customers
Being paid a salary
Delegating tasks
Which of these best describes profit as a reward?
Total money received from sales
The surplus after costs are subtracted from revenue
The total amount of money borrowed
The value of assets
How can market research help reduce risk?
By increasing competition
By providing information to make better decisions
By guaranteeing success
By reducing production costs
What is one way to reduce the financial risk of starting a business?
Borrow as much as possible
Start on a small scale and grow gradually
Avoid planning
Ignore cash flow forecasts
Which of these is a potential reward of business success?
Debt
Job insecurity
Building a strong brand reputation
Increased costs
What does limited liability mean?
The owner is responsible for all debts
The owner only loses what they invested in the business
The owner keeps all profits
The owner cannot be sued
Why is uncertainty a key element of risk?
Because outcomes are predictable
Because future events cannot be known for sure
Because businesses never change
Because competitors are always weaker
Which of the following is an example of a financial reward?
Satisfaction from success
Gaining profit and income
Pride in independence
Recognition from others
Which of the following best describes a calculated risk?
A decision made without information
A decision made after considering possible outcomes
A decision made randomly
A decision guaranteed to succeed
Why might an entrepreneur accept risk?
To achieve higher rewards and growth
To ensure failure
To avoid competition
To reduce motivation
Which of these is a way to spread business risk?
Focus on only one product
Diversify products or markets
Stop marketing
Avoid customers
What might happen if an entrepreneur overestimates demand?
They sell all their stock
They face wasted resources and unsold products
They increase profits
They avoid risk entirely
What is meant by an opportunity cost?
The value of what must be given up when choosing one option over another
The total revenue gained from a decision
The profit margin from a product
The cost of labour
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What is the main purpose of a business enterprise?
To increase government spending
To provide goods or services to satisfy customer needs
To employ as few people as possible
To reduce competition
What does the term “entrepreneur” mean?
Someone who manages an existing company
A person who takes risks to start and run a business
A government official who regulates trade
A business investor who avoids risk
This topic explores why businesses exist, how they add value, and the purpose of enterprise and entrepreneurship.
A) Taking action to set up and run a business
B) Working as an employee
C) Avoiding risk in business
D) Producing only for local markets
What is one of the main roles of an entrepreneur?
Following instructions from others
Organising resources and taking risks to achieve business success
Avoiding innovation
Working only for financial reward
This topic explores why businesses exist, how they add value, and the purpose of enterprise and entrepreneurship. Which of these is a key factor of production?
A) Land, labour, capital, and enterprise
B) Money, customers, and staff
C) Profit, price, and product
D) Tax, trade, and tariffs
This topic explores why businesses exist, how they add value, and the purpose of enterprise and entrepreneurship. What is meant by adding value?
Reducing the selling price
Making a product more desirable than the cost of its inputs
Selling products at cost price
Copying competitor designs
This topic explores why businesses exist, how they add value, and the purpose of enterprise and entrepreneurship.
Branding
Improving quality
What does profit act as for entrepreneurs?
A reward for taking risk
A guaranteed outcome
A government payment
A form of taxation
Why is creativity important in business?
It helps a business copy competitors
It encourages innovation and problem solving
It increases risk unnecessarily
It stops business growth
Which of these is an example of an entrepreneur identifying a business opportunity?
Ignoring customer complaints
Spotting a gap in the market for eco-friendly packaging
Copying another company’s prices
Reducing product variety
What does the term “goods” refer to?
Intangible services
Physical, tangible products
Customer experience
Staff performance
Which of the following is an example of a service?
A smartphone
A haircut
A pair of trainers
A chocolate bar
What is one purpose of business enterprise in the economy?
To create employment and generate wealth
To restrict consumer choice
To prevent innovation
To limit productivity
What type of reward is “independence”?
Financial
Non-financial
Guaranteed
Legal
Which of the following best explains opportunity cost?
The cost of producing goods
The benefit given up when choosing one option over another
The revenue made from a product
The cost of labour
How can a business add value through branding?
By making customers more loyal and willing to pay higher prices
By reducing promotion
By ignoring quality
By cutting packaging design
Which of these best describes a social enterprise?
A business that aims to make profits to benefit society
A charity with no income
A government-funded project
A large international corporation
What is meant by customer needs?
Wants that people can live without
Essential requirements such as price, quality, and convenience
The owner's business goals
What competitors demand
Why might a business change its product over time?
To meet new customer needs and preferences
To reduce variety
To ignore competitors
To increase production costs
What does the term “unique selling point” (USP) mean?
A feature that makes a product stand out from competitors
A way of reducing prices
A marketing slogan
A government award
This topic focuses on how businesses identify and respond to what customers want and need in order to remain successful. What is the main reason a business needs to understand customer needs?
To create products and services that satisfy customers
To reduce production costs
To attract investors
To increase competition
This topic focuses on how businesses identify and respond to what customers want and need in order to remain successful.
The number of employees
The customer’s desire for good value and quality
The business’s profit target
The business’s tax obligations
What does quality mean to a customer?
The cheapest material used
The number of employees involved
The overall standard or reliability of a product or service
The lowest possible price
This topic focuses on how businesses identify and respond to what customers want and need in order to remain successful. Why is convenience important to customers?
It saves customers time and effort
It increases delivery times
It reduces product variety
It makes the product harder to buy
This topic focuses on how businesses identify and respond to what customers want and need in order to remain successful.
Offering no after-sales support
Ignoring complaints
Refusing refunds
Responding politely and solving problems quickly
This topic focuses on how businesses identify and respond to what customers want and need in order to remain successful. Which of the following is a benefit of meeting customer needs?
Falling sales
Reduced motivation
Increased customer loyalty
Negative brand image
This topic focuses on how businesses identify and respond to what customers want and need in order to remain successful. What might happen if a business fails to meet customer needs?
What is meant by identifying a customer’s price sensitivity?
A) Understanding how demand changes with price
B) Offering identical prices to competitors
C) Setting only low prices
D) Ignoring pricing strategy
What does the term “customer expectations” refer to?
What customers believe they will get from a product or service
What employees want from their managers
What shareholders demand
What suppliers need
Which of these factors can influence customer needs?
Supplier prices only
Government policies
Age, lifestyle, and income
Staff experience
Why might different customers have different needs?
They all want the same product
Businesses only target one group
Needs never change
They have different incomes, tastes, and lifestyles
What is meant by customer satisfaction?
When a product or service meets or exceeds expectations
When a customer complains about poor service
When the product is priced high
When the business focuses only on profit
