AQA ALEVEL Business Studies Unit 1 - Questions for revision
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Course
What is a business?
Institution
AQA
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Dive into Unit 1: What is a Business?
Key Terms and Definitions
Get ahead with essential terminology:
Business: Where goods and services meet money.
Sole Trader: One-person operation.
Partnership: Teamwork makes the dream work.
Private ...
CONTENT:
• One unit/section
• Key terms and definitions
• Quick fire questions
• Longer or more challenging questions
• Exam questions
UNIT 1: What is a Business?
→ Business: An organization or economic system where goods and services are
exchanged for one another or for money.
→ Sole trader: A business owned and operated by a single individual.
→ Partnership: A business owned by two or more people who share
responsibilities and profits.
→ Private limited company (Ltd): A business owned by shareholders with limited
liability, but shares cannot be traded publicly.
→ Public limited company (Plc): A company whose shares are traded freely on a
stock exchange.
→ Stakeholder: A person, group, or organization with an interest in a particular
business.
→ Limited liability: The legal protection for the owners of a business, where their
personal assets are separate from the business's assets in case of bankruptcy.
→ Sectors of industry: The categorization of businesses based on the type of
economic activity they engage in (primary, secondary, tertiary).
→ Franchise: A business operated under a license from another business (the
franchisor).
→ Mission statement: A statement of the purpose and goals of a business.
, → Vision statement: A statement describing the desired future position of a
business.
1. Why do businesses exist?
Q: What is the purpose of businesses?
A: Businesses exist to satisfy human needs and wants by producing goods and services. They play a crucial role in the
economy by creating employment, generating income, and contributing to economic growth and development.
2. Mission, Aims, and Objectives
Q: What is the difference between a mission, aims, and objectives for a business?
A:
• Mission: A mission statement outlines the overall purpose and direction of a business, reflecting its values
and aspirations.
• Aims: Aims are broad, long-term goals that a business strives to achieve, providing a sense of direction.
• Objectives: Objectives are specific, measurable targets set by a business to accomplish its aims, often within
a defined time.
3. Revenue, Costs, and Profit
Q: How do revenue, costs, and profit relate to each other in a business context?
A:
• Revenue: Revenue is the total income generated from sales of goods or services.
• Costs: Costs are the expenses incurred by a business in the process of producing and selling goods or
services.
• Profit: Profit is the difference between total revenue and total costs, indicating the financial performance of
a business.
4. Types of Businesses and Their Advantages and Disadvantages
Q: What are the different types of businesses, and what are their respective advantages and disadvantages?
A:
• Sole Trader:
o Advantages: Easy to set up, full control, minimal regulatory requirements.
o Disadvantages: Unlimited liability, limited access to finance, reliance on owner's skills and resources.
• Partnership:
o Advantages: Shared responsibility and expertise, easier access to finance.
o Disadvantages: Unlimited liability, potential for conflicts between partners.
• Private Limited Company (Ltd):
o Advantages: Limited liability, separate legal entity, easier access to finance.
o Disadvantages: Complex legal requirements, restrictions on transferring ownership.
• Public Limited Company (Plc):
o Advantages: Access to capital markets, limited liability.
o Disadvantages: Stringent regulatory requirements, loss of control for original owners.
5. The Role of Shareholders
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