Unit 1- Exploring Business
Complete Revision Questions and Answers
Learning Aim A - Explore the features of different businesses
and analyse what makes them successful
Q. What is the economy?
A. An economy is a system of making and selling things of value. These
things are usually in one of 2 categories - products (tangible items such
as toilet roll) and services (something done by people such as business
consulting).
Q. What are the different sectors in the economy?
A. The primary sector covers raw products, like farming and mining.
The secondary sector covers the manufacturing of goods.
The tertiary sector covers a range of services provided to people and
companies.
Q. What is a sole trader?
A. A sole trader is a self-employed person who owns and controls their
own business by themselves.
● Some people say that as a sole trader, you are the business.
● As a sole trader, you have complete control over your business,
assets, and profits.
● Unlike a limited company, a sole trader is individually liable for
their business’s debts. Their assets may be at risk if they cannot
pay creditors.
● There is no obligation to register the firm with Companies House
or make filings of information with them.
● Sole traders have to report and pay tax to HMRC through a
self-assessment form once a year.
Q. What is a general partnership?
A. A general partnership provides a simple way for two or more people to
own and manage a company together, contributing resources, skills and
time – similar to how a single person can operate a business as a sole
trader.
, Q. What does liability mean?
A. Liability is the state of being legally responsible for something, such as
the debts of a business.
● A company can have limited or unlimited liability.
Q. What is the difference between limited and unlimited liability?
A. As a company with limited liability, your assets are safe from debt;
however, your assets are not safe with unlimited liability.
Q. What is revenue?
A. Revenue is the income earned by a business for selling its products and
services.
Q. What does FTSE stand for and what is it?
A. FTSE stands for The Financial Times Stock Exchange.
● It is a share index of the 100 companies with the highest market
capitalisation listed on the London Stock Exchange.
Q. What is freedom of entry?
A. A business has the freedom of choosing to enter and leave the market
due to an unlimited number of buyers and sellers.
Q. What are two examples of non-profit businesses?
A. - Voluntary - Acorn Children's Hospice
- Charitable trust - The Princes Trust
Q. Name the purpose of business and Explain how it varies between business
types
A. The purpose of business is to provide products and services.
● For-profit businesses aim to make as much money as possible
and forward these profits to stakeholders.
● Non-profit businesses aim to meet societies needs, such as
housing or education.
Q. What is the scope of a business?
A. Any business's scope involves every activity performed by that
business, including sales, services, product developments, marketing,
and contracts.
● Business scope refers to all business operations, particularly
those required to secure revenue.
Complete Revision Questions and Answers
Learning Aim A - Explore the features of different businesses
and analyse what makes them successful
Q. What is the economy?
A. An economy is a system of making and selling things of value. These
things are usually in one of 2 categories - products (tangible items such
as toilet roll) and services (something done by people such as business
consulting).
Q. What are the different sectors in the economy?
A. The primary sector covers raw products, like farming and mining.
The secondary sector covers the manufacturing of goods.
The tertiary sector covers a range of services provided to people and
companies.
Q. What is a sole trader?
A. A sole trader is a self-employed person who owns and controls their
own business by themselves.
● Some people say that as a sole trader, you are the business.
● As a sole trader, you have complete control over your business,
assets, and profits.
● Unlike a limited company, a sole trader is individually liable for
their business’s debts. Their assets may be at risk if they cannot
pay creditors.
● There is no obligation to register the firm with Companies House
or make filings of information with them.
● Sole traders have to report and pay tax to HMRC through a
self-assessment form once a year.
Q. What is a general partnership?
A. A general partnership provides a simple way for two or more people to
own and manage a company together, contributing resources, skills and
time – similar to how a single person can operate a business as a sole
trader.
, Q. What does liability mean?
A. Liability is the state of being legally responsible for something, such as
the debts of a business.
● A company can have limited or unlimited liability.
Q. What is the difference between limited and unlimited liability?
A. As a company with limited liability, your assets are safe from debt;
however, your assets are not safe with unlimited liability.
Q. What is revenue?
A. Revenue is the income earned by a business for selling its products and
services.
Q. What does FTSE stand for and what is it?
A. FTSE stands for The Financial Times Stock Exchange.
● It is a share index of the 100 companies with the highest market
capitalisation listed on the London Stock Exchange.
Q. What is freedom of entry?
A. A business has the freedom of choosing to enter and leave the market
due to an unlimited number of buyers and sellers.
Q. What are two examples of non-profit businesses?
A. - Voluntary - Acorn Children's Hospice
- Charitable trust - The Princes Trust
Q. Name the purpose of business and Explain how it varies between business
types
A. The purpose of business is to provide products and services.
● For-profit businesses aim to make as much money as possible
and forward these profits to stakeholders.
● Non-profit businesses aim to meet societies needs, such as
housing or education.
Q. What is the scope of a business?
A. Any business's scope involves every activity performed by that
business, including sales, services, product developments, marketing,
and contracts.
● Business scope refers to all business operations, particularly
those required to secure revenue.
