AQA Business: Summary of Key Terms EXAM
QUESTIONS (223 TERMS) WITH VERIFIED
DEFINITIONS UPDATED 2024
1). Mission statement
Ans: a declaration of a business’s core purpose and focus.
2). Objective
Ans: a goal to help a business achieve its mission.
3). Profit
Ans: the amount of money remaining once all costs have been deducted from the
revenue.
4). Revenue
Ans: money received from sales.
5). Variable costs
Ans: costs that vary as a direct result of changes in the level of output.
6). Fixed costs
Ans: costs that do not change as a result of changes in the level of output.
7). Private sector
Ans: part of the economy made up of private enterprises — businesses that are
owned and controlled by individuals or groups of individuals.
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, 8). Corporate businesses
Ans: businesses which have a legal identity that is separate from that of their owners.
9). Limited liability
Ans: restricts the financial responsibility of shareholders for a company’s debts to the
amount they have individually invested.
10). Not-for-profit business
Ans: an organisation that has business objectives other than making a profit.
11). Public sector
Ans: part of the economy that is owned and controlled by the government or local
authorities.
12). Privatisation
Ans: the process of converting government owned and controlled industries/
businesses to the private sector.
13). Shareholders
Ans: the owners of a limited company and include any person, company or other
institution that owns at least one share.
14). Dividend
Ans: a share of the after-tax profit of a company distributed to its shareholders
according to the number of shares held.
15). Market capitalisation
Ans: is calculated as follows: share price × number of shares issued
16). Scientific decision-making
Ans: decision-making based on data that uses a logical and rational approach.
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, 17). Opportunity cost
Ans: the next best alternative forgone.
18). Intuition
Ans: making decisions based on gut feeling rather than data and rational analysis.
19). Decision trees
Ans: tree-like diagrams showing various options, their probabilities and financial
outcomes.
20). Stakeholder
Ans: any individual or group who has an interest in the activities and performance of a
business.
21). Market share
Ans: the percentage of a market’s total sales that is earned by a particular company
over a specified time period.
22). Brand loyalty
Ans: when consumers become committed to a particular brand and make repeat
purchases over time.
23). Market research
Ans: the process of gathering data on potential customers.
24). Primary research
Ans: the collection of information for the first time for specific purposes.
25). Secondary research
Ans: the collection of data that already exists and has been used for other purposes.
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