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Summary Business IGCSE Key words
All the key words for Pearson Edexcel Business IGCSE
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Key word DefinitionAbove-the-line promotion Placing adverts using the media
Account’s clerk Someone who keeps records or accounts in an office
Acid test ratio Similar to current ratio but excludes stocks from current assets
Adjustments Includes adjustments for the profits made on the disposal of assets
Advertising Communication between a business and its customers where
messages are placed in the media to encourage the purchase of
products
Agent or broker Intermediary that brings together buyers and sellers
Analysis The process of looking at data to identify patterns or trends
Anti-competitive practices Attempts by firms to prevent or restrict competition
Apprenticeship System of new entrants to a trade or profession, often younger
workers, mostly on-the-job training but often with some college
attendance.
Arrears Money that you owe someone, or is owed to you, because you have
not made, or have received, regular payments at the correct
intervals or amounts
Assembly plant Factory where parts are put together to make a finished product
Asset Any item of value that a business owns, such as its machinery or
premises
Assisted areas Areas that are designated by a government as having economic
problems and are targeted to receive support in a variety of forms
Audit Official examination of a company’s financial records in order to
check that they are correct
Auditing Accounting procedure that checks thoroughly the accuracy of a
company’s accounts
Automation Use of computers and machines instead of to do a job
Automotive Relating to cars
Axes The reference lines on a graph
Balance of trade (visible balance) Difference between visible exports and visible imports
Bank loan A fixed sum of money lent by a bank to an individual or a business
for a specific purpose, which must be repaid with interest in set
payments over an agreed period of time
Bank overdraft Agreement with a bank where a business spends more money than it
has in its accounts (up to an agreed limit)
Barriers to entry Restriction that mean it is difficult for new firms to enter a market
Batch production Method that involves completing one operation at a time on all units
before performing the next
Below-the-line promotion Any promotion that does not involve using the media
Biased Unbalanced or inclined to agree with a particular judgement or ideas
rather than presenting the evidence fairly
Bid Offer to pay a particular price for something
Bonus systems Payment in addition to the basic wage for reaching targets or in
recognition for service
Boston matrix 2x2 matrix that describes according to the market share they enjoy
and whether the market has any potential for growth
Brand loyalty A customer’s willingness to buy a product from a particular business
rather than from its competitors
Break-even chart Graph that shows total costs and total revenue; break-even point is
where total cost and total revenue intersect
Break-even point The point where revenue received meets all of the costs of the
business: neither a profit nor a loss is made
Brownfield sites Areas of land that were once used for urban development
Budgetary measures Action taken by the government to influence business and the
economy
,Budgets Pre-set financial targets for a business to achieve, like a sales budget,
or abide by, such as an expenditure budget, in a given period of
time.
An official statement that a government makes about how much it
intends to spend and what the rates of taxes will be for the next year
or six months.
Bulk breaking Dividing a large quantity of goods received from a supplier before
selling them on in smaller quantities to customers
Bulk buying Buying good in large quantities, which is usually cheaper than buying
in small quantities
Bulk-gaining product A product that is bigger than the raw materials used to make it, such
as a bicycle
Bulk-reducing product A product that is smaller than the raw materials it uses, such as
paper
Business A place where a firm buys and sells things in exchange for money;
while producing an output (a good or service)
Business plan A document that outlines how an entrepreneur is going to set up a
new business
Capital Finance provided by the owners of a business
Capital employed Amount of money invested in a business
Capital-intensive Use of relatively more machinery than labour in production
Capital-intensive production Production methods that make more use of machinery relative to
labour
Cash flow The amount of money coming in and going out of the business and
the timing of the movement
Cash flow forecast Prediction of all expected receipts and expenses of a business over a
future time period, which shows the expected cash balance at the
end of each month
Cash inflow Flow of money into a business
Cash outflow Flow of money out a business
Centralised Type of organisation system where most decisions are made at the
top of the organisation and then passed down the chain of command
Certificate of incorporation Document needed before a new company can start doing business
Chairperson Someone who is in charge of a meeting or directs the work of a
committee or organisation
Chamber of commerce A local association that promotes the interest of businesses in a
county or region
Charities Organisations that give money, goods or help to people who are
poor, sick or in need
Cheque A written order to a bank to pay an amount of money from an
account holder’s account to a specified person
Closing cash balance Amount of cash that the business expects to have at the end of each
month
Commission Extra amount of money that is paid to a person or organisation
according to the value of the goods they have sold or the services
they have provided
Payment based on the value of sales, usually a percentage of sales
made
Commodities Products that are bought and sold
Communication channels Routes along which information might travel in a business
,Competition-based pricing Pricing strategies based on the prices charged by rivals
Comply Obey a command or meet a set of standards
Computer aided design (CAD) Use of computers to design products
Computer aided manufacturing (CAM) Where computers link and control the design and production of
goods in manufacturing
Computer integrated manufacturing (CIM) Use of computers to control the entire production process
Computer numerically controlled machines Machines that carry out the instructions fed by computers
(CNCs)
Conflict A serious disagreement, usually between people, countries or ideas
Consumables Items that get ‘used up’, such as pens, paper, staples and other
items that a business has to replace regularly
Consumer Someone who buys and uses goods and services
Consumer cooperative Cooperative that is owned by its customers
Consumer goods Goods and services sold to ordinary people (consumers) rather than
businesses
Consumer panels Groups of customers are asked for feedback about products over a
set period of time
Contracts of employment Written agreements between an employer and an employee in
which each has certain obligations
Convenience A product or service’s ability to fit in well with a customer’s lifestyle
or routine, the ease with which it can be used and/or its easy to
reach location
Convenience good A product that a customer buys frequently or routinely
Cookies Small files stored on a customer’s computer when the customer
visits a website, which record details about that visit and can be
accessed by the website when the customer visits it again
Cooperative Company, factory or organisation in which all the people working
there, own an equal share of it
Cost-based pricing Adding a percentage (the mark-up) to the costs of producing a
product to get the price
Costs Expenses that must be met when setting up and running a business
Coupons Printed piece of paper given to customers by the seller of a product,
allowing the customer to pay less than usual for the product when
they next buy it, or to get a free gift
Credit The amount of money that a financial institution or supplier will
allow a business to use, which it must pay back in the future at an
agreed time
Credit check A check on the financial status of a business or individual to ensure
that the business or the individual has a reliable credit history and
does not have any existing outstanding debts
Crowd funding Where a large number of individuals (the crowd) invest in a business
venture using an online platform and therefore avoiding using a
bank
Currency reserves Money in foreign currency held by a country and used to support its
own currency and to pay for imports and foreign debts
Current assets Assets likely to be changed into cash within a year
Current liabilities Debts that have to be repaid within a year
Current ratio Assesses the firm’s liquidity by diving current liabilities into current
assets.
, Data Information, particularly statistics, that can be collected and
analysed
Debenture Long-term security yielding a fixed rate of interest, issued by the
company and security against assets
Decentralised Type of organisation system where decision making is pushed down
the chain of command and away from the top
Deed of partnership Binding legal document that states the formal rights in a partnership
De-industrialisation Decline in manufacturing
Demographic segmentation Dividing a market according to the type of people that make up a
particular group, in particulate their lead, sex and income
Demographics The characteristics of the population, such as gender, age, religion,
wealth and so on
Design brief Set of instructions about what a new product should look like or
what feature it should have
Destroyer or predatory pricing Setting a low price until rivals have gone out of business
Direct mail Advertisement and that are sent to people in the post, often people
who have been chosen because they might be interested in the
product
Direct selling Where businesses sell their products directly to consumers
Discrimination When someone is treated differently to someone else because of a
particular characteristic, such as a disability, their ethnicity or their
sex
Diseconomies of scale Rising average costs when a firm becomes too big
Distributed profit Profit that is returned to the owners of a business
Distribution channel Route taken by a product from the producer to the customer
Diversify If a business, company or country diversifies, it increases the range
of goods or services it produces
Dividends Share of the profit paid to shareholders in a company
Division of labour Specialisation in specific tasks or skills by an individual
Downsizing Process of reducing capacity, usually by laying off staff
Downturn Period or process in which business activity, production, etc. is
reduced and conditions become worse
Downward communication Passing messages from the top of the organisation to those at the
bottom
Drawings Money taken out of the business by the owner for personal use
Dumping Where a business sells goods in another country often below cost
Early adopters Consumers who are keen to buy new products as soon as they are
launched
E-commerce Using the internet to carry out business transactions (sell goods or
services)
Economies of scale Financial advantages (falling average costs) of producing something
in very large quantities
Economy The system by which a country’s money and goods are produced and
used
Emerging economies Rapidly growing economies – have huge growth potential but also
pose significant risks
Employment tribunal Court that deals with cases involving disputes between employers
and employees
Enterprise Entrepreneurial activity (can also mean a business or company)
Enterprise The activity of starting and running businesses
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