Book Title:
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Some examples from this set of practice questions
1.
What is the economy?
Answer: 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).
2.
What are the different sectors in the economy?
Answer: 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.
3.
What is a sole trader?
Answer: 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.
4.
What is a general partnership?
Answer: 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.
5.
What does liability mean?
Answer: 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.
6.
What is the difference between limited and unlimited liability?
Answer: As a company with limited liability, your assets are safe from debt; however, your assets are not safe with unlimited liability.
7.
What is revenue?
Answer: Revenue is the income earned by a business for selling its products and services.
8.
What does FTSE stand for, and what is it?
Answer: 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.
9.
What is freedom of entry?
Answer: A business has the freedom of choice to enter and leave the market due to an unlimited number of buyers and sellers.
10.
What are two examples of non-profit businesses?
Answer: - Voluntary - Charitable trust
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