EDEXCEL BUSINESS A LEVEL PAPER 2 (THEME 2 & 3) QUESTIONS WITH 100- CORRECT ANSWERS 2024

EDEXCEL BUSINESS A LEVEL PAPER 2
(THEME 2 & 3) QUESTIONS WITH 100%
CORRECT ANSWERS 2024
RetainedMprofitsM-McorrectManswer-
profitsMthatMtheMownersMhaveMreinvestedMintoMtheMbusinessMafterMpayingMcostsMandMtaxes



Owners'MfundsM-McorrectManswer-moneyMputMinMbyMtheMownersMthemselves



SaleMofMassetsM-McorrectManswer-aMone-
offMwayMtoMraiseMmoney,MgenerallyMusedMduringMfinancialMstruggles



BenefitsMofMownersMfundsM-McorrectManswer-AvoidsMinterestMonMloans

OwnersMkeepMcompleteMcontrol



DisadvantagesMofMownersMfundsM-McorrectManswer-
IfMitMfailsMafterMremortgaging,MtheyMcouldMloseMtheirMhouse

LimitMtoMamountMraised



ShortMtermMfinanceMexamplesM-McorrectManswer-overdraftsMforMdailyMexpenses



MediumMtermMfinanceMexamplesM-McorrectManswer-
loans,MhireMpurchase,MtradeMcredit,MdebtMfactoringMusedMtoMpayMforMrepairs,MpaidMbackMafterM1-5Myears



LongMtermMfinanceMexamplesM-McorrectManswer-
issuingMshares,Mdebentures,Mmortgages,MgrantsMusedMtoMpayMforMmajorMexpenditure,MpaidMbackMoverMm
anyMyears



SellingMassetsM-McorrectManswer-CanMsellMmachines,Mbuildings,Mland

LimitedMbuyers

AdvertisingMcosts

,SoldMcheaply



LoansM-McorrectManswer-HighMinterestMrates

UsuallyMrequiresMsecurityMinMtheMformMofMassetsMwhichMwillMbeMtakenMawayMifMtheyMdon'tMmakeMtheMrep
ayments

NeedsMregularMupdates



GrantsM-McorrectManswer-NoMrepayment

MayMbeMrecalledMifMconditionsMaren'tMmet

MayMnotMcoverMfullMamount



HireMpurchaseM/MleasingM-McorrectManswer-MustMpayMdepositMandMmonthly

OwnMassetsMatMtheMend

LeasingMdoesMnotMleadMtoMownership

MustMpayMinterest

WillMbeMre-claimedMifMnotMpaidMfor



IssuingMsharesM-McorrectManswer-OnlyMforMaMlimitedMcompanyM(ltd,Mplc)

NoMriskMbutMmustMpayMyearlyMdividends

ShareholdersMatMriskMasMsharesMfluctuate

ShareholdersMhaveMinfluence



VentureMcapitalM-McorrectManswer-LargeMbusinessesMlendMtoMsmallerM(notMplc)Mbusinesses

LenderMbecomesMshareholder

AimMtoMgrowMbusinessMsoMshareMpriceMincreases

LendersMplayMactiveMrole



RevenuesM-McorrectManswer-theMamountMofMproductMthatMaMcustomerMactuallyMbuys

,TotalMrevenueMequationM-McorrectManswer-volumeMsoldMxMaverageMsellingMprice



ProfitMasManMobjectiveM-McorrectManswer-ProfitMisMtheMmostMimportantMsourceMofMcashMflowMandMfinance

CanMbeMotherMreasonsMforMrunningMaMbusinessMthanMprofit



WhyMprofitMisMimportantM-McorrectManswer-AMreturnMonMinvestment

AMrewardMforMtakingMrisks

AMkeyMsourceMofMfinance

AMmeasureMofMbusinessMsuccess

AMmotivatingMfactor



ProfitMequationM-McorrectManswer-totalMsalesM-MtotalMcosts



CostsM-McorrectManswer-amountsMthatMaMbusinessMincursMinMorderMtoMmakeMgoods/services



CostsMareMimportantMbecauseM-McorrectManswer-TheyMdrainMawayMprofit

ChangeMprofitMmargins

MainMcausesMofMcashMflowMproblems

ChangesMwithMoutput



VariableMcostsM-McorrectManswer-ChangeMasMoutputMvaries

LowerMriskMforMstartups



VariableMcostMexamplesM-McorrectManswer-RawMmaterials

BroughtMinMstocks

WagesMbasedMonMhours

MarketingMcostsMbasedMonMsales



FixedMcostsM-McorrectManswer-Don'tMchangeMwithMoutput

, HigherMriskMforMstartups



FixedMcostMexamplesM-McorrectManswer-RentM&Mrates

Salaries

Advertising

Insurance,Mbanking,MlegalMfees

Software

Advisers



TotalMcostsMequationM-McorrectManswer-fixedMcostsM+MvariableMcosts



ProblemsMestimatingMcostsM-McorrectManswer-SomeMareMeasierMthanMothers

Rent,Msalaries,Madvertising

OthersMareMharder

RawMmaterials

ReturnsMorMrefunds



BudgetM-McorrectManswer-
aMfinancialMplanMforMtheMfutureMconcerningMtheMrevenuesMandMcostsMofMaMbusiness



ManagerialMaccountabilityM-McorrectManswer-BudgetsMonMtheMobjectives

ManagersMareMrequiredMtoMthinkMahead



BudgetMusesMforMmanagementM-McorrectManswer-SetMtargetsM

MotivateMstaffs

ImproveMefficiency

ForecastMoutcomes

MonitorMperformances

AssignMresponsibilities