AQA A-LEVEL BUSINESS PAPER 1
REVISION QUESTIONS WITH CORRECT ANSWERS
2025-2026
Why businesses exist - correct answer-Can make you money and you can be your own boss
Mission - correct answer-
a business aim expressed to make it seem especially purposeful and motivating
Objectives - correct answer-SMART Specific, Measurable, Achievable, Realistic, Time-bound
Why businesses set objectives - correct answer-- it is motivating to have a goal to aim toward
- as a boss you can not make every decision
Profit - correct answer-Revenue - total costs
What are the 5 types of business - correct answer--sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - correct answer-a business that is owned and operated by one person
Private Limited Company (Ltd) - correct answer-
A small to medium sized company, owned by shareholders who have limited liability. The company
cannot sell its shares to the general public.
Private Limited Company Advantages - correct answer--Limited liability
-Additional capital can be raised by selling shares (not to the general public)
,-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - correct answer--
You have to publish the account information
-You need two share of £1 each
Public limited company (plc) - correct answer-
A limited company with more that £50,000 of share capital. Any member of the public can buy sh
ares. Public companies must publish more detailed accounts
Public limited company Advantages - correct answer--Raising capital through public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
-Separate legal entity to the owner
public limited company Disadvantages - correct answer--More regulations that could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - correct answer-Organisations owned by individuals or companies
Public sector organisations - correct answer-Businesses owned by the government.
Non-profit organisations - correct answer-
Businesses with a motive other than profit, may be to provide a social benefit or service to societ
y or to support a cause.
,Share capital - correct answer-
The total value of capital raised from shareholders by the issue of shares
Role of Shareholders - correct answer-
to raise important issues with the board directors and raise funds
Why shareholders invest - correct answer--Annual dividend payments
-A rise in the value of shares
Market capitalisation - correct answer-Number of issued shares x current share price
Influences on the price of shares - correct answer--
The profit after tax of the company x the value investors place on on those earnings
Significance of share price changes - correct answer-
High = cheap and easy to obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - correct answer--Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - correct answer--The number of competitors in a particular market
-The intensity of competitiveness
-Total market available
-The rate at which the market is growing
, Competition - correct answer-
The tighter the economic and market conditions, the greater the competitive pressures tend to be
Factors that effect household incomes - correct answer--
Changes in the real income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - correct answer-
If interest rates go up, businesses and individuals spend less. If interest rates go down, businesses
and individuals spend more.
Demographic factors - correct answer--Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - correct answer-
Concern for green issues and ethical issues involved with business.
What do managers do - correct answer-
Set objectives, organize, motivate and communicate, measure, develop people
What are the leadership styles - correct answer--Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - correct answer-
Managers who centralise power and tell employees what to do. They tend to use one-way, top-
down communication.
REVISION QUESTIONS WITH CORRECT ANSWERS
2025-2026
Why businesses exist - correct answer-Can make you money and you can be your own boss
Mission - correct answer-
a business aim expressed to make it seem especially purposeful and motivating
Objectives - correct answer-SMART Specific, Measurable, Achievable, Realistic, Time-bound
Why businesses set objectives - correct answer-- it is motivating to have a goal to aim toward
- as a boss you can not make every decision
Profit - correct answer-Revenue - total costs
What are the 5 types of business - correct answer--sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - correct answer-a business that is owned and operated by one person
Private Limited Company (Ltd) - correct answer-
A small to medium sized company, owned by shareholders who have limited liability. The company
cannot sell its shares to the general public.
Private Limited Company Advantages - correct answer--Limited liability
-Additional capital can be raised by selling shares (not to the general public)
,-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - correct answer--
You have to publish the account information
-You need two share of £1 each
Public limited company (plc) - correct answer-
A limited company with more that £50,000 of share capital. Any member of the public can buy sh
ares. Public companies must publish more detailed accounts
Public limited company Advantages - correct answer--Raising capital through public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
-Separate legal entity to the owner
public limited company Disadvantages - correct answer--More regulations that could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - correct answer-Organisations owned by individuals or companies
Public sector organisations - correct answer-Businesses owned by the government.
Non-profit organisations - correct answer-
Businesses with a motive other than profit, may be to provide a social benefit or service to societ
y or to support a cause.
,Share capital - correct answer-
The total value of capital raised from shareholders by the issue of shares
Role of Shareholders - correct answer-
to raise important issues with the board directors and raise funds
Why shareholders invest - correct answer--Annual dividend payments
-A rise in the value of shares
Market capitalisation - correct answer-Number of issued shares x current share price
Influences on the price of shares - correct answer--
The profit after tax of the company x the value investors place on on those earnings
Significance of share price changes - correct answer-
High = cheap and easy to obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - correct answer--Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - correct answer--The number of competitors in a particular market
-The intensity of competitiveness
-Total market available
-The rate at which the market is growing
, Competition - correct answer-
The tighter the economic and market conditions, the greater the competitive pressures tend to be
Factors that effect household incomes - correct answer--
Changes in the real income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - correct answer-
If interest rates go up, businesses and individuals spend less. If interest rates go down, businesses
and individuals spend more.
Demographic factors - correct answer--Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - correct answer-
Concern for green issues and ethical issues involved with business.
What do managers do - correct answer-
Set objectives, organize, motivate and communicate, measure, develop people
What are the leadership styles - correct answer--Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - correct answer-
Managers who centralise power and tell employees what to do. They tend to use one-way, top-
down communication.
