Business A level - Paper 2 2024/2025
Exam Questions and Correct Answers |
New Update
What is a budget? - 🧠 ANSWER ✔✔- Financial plan
- Yearly
- Looks at revenue, costs and profits
What are the uses of budgets? - 🧠 ANSWER ✔✔- Control income and
expenditure/forecast
- Establish priorities and set targets
- Monitor performance within business
- Increase motivation within employees
Drawbacks of budgeting (forecasting) - 🧠 ANSWER ✔✔- Hard to predict
sales and revenue if business is in a dynamic market
- Start-up businesses = not enough data for accurate results
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
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STATEMENT. ALL RIGHTS RESERVED
, - Difficult to predict competitors/external changes which can have an
influence on revenue/sales
Drawbacks of budgeting (costs) - 🧠 ANSWER ✔✔- Always likely to be
unpredicted costs
- Changes in external environment = impact costs e.g. interest rates rising,
exchange rates and taxes.
What is budget variances? - 🧠 ANSWER ✔✔- Calculating and investigating
the difference between actual results of budgets.
- Variances can either be FAVOURABLE or ADVERSE
What is a favourable variance? - 🧠 ANSWER ✔✔- When the actual figures
are better than the predicted budgeting figures
- Strong demand = increase in expected revenue
- Selling prices increased = potential increase in revenue if product demand
is inelastic
What is an adverse variation? - 🧠 ANSWER ✔✔- When the actual figures
are worse than the predicted budgeting figures
- Unexpected rise in costs
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
Exam Questions and Correct Answers |
New Update
What is a budget? - 🧠 ANSWER ✔✔- Financial plan
- Yearly
- Looks at revenue, costs and profits
What are the uses of budgets? - 🧠 ANSWER ✔✔- Control income and
expenditure/forecast
- Establish priorities and set targets
- Monitor performance within business
- Increase motivation within employees
Drawbacks of budgeting (forecasting) - 🧠 ANSWER ✔✔- Hard to predict
sales and revenue if business is in a dynamic market
- Start-up businesses = not enough data for accurate results
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
1
STATEMENT. ALL RIGHTS RESERVED
, - Difficult to predict competitors/external changes which can have an
influence on revenue/sales
Drawbacks of budgeting (costs) - 🧠 ANSWER ✔✔- Always likely to be
unpredicted costs
- Changes in external environment = impact costs e.g. interest rates rising,
exchange rates and taxes.
What is budget variances? - 🧠 ANSWER ✔✔- Calculating and investigating
the difference between actual results of budgets.
- Variances can either be FAVOURABLE or ADVERSE
What is a favourable variance? - 🧠 ANSWER ✔✔- When the actual figures
are better than the predicted budgeting figures
- Strong demand = increase in expected revenue
- Selling prices increased = potential increase in revenue if product demand
is inelastic
What is an adverse variation? - 🧠 ANSWER ✔✔- When the actual figures
are worse than the predicted budgeting figures
- Unexpected rise in costs
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
