GCSE Edexcel Business Unit 1 June 2010

19 Questions

Settings
Please wait...
GCSE Quizzes & Trivia

Unit 1 multiple choice - 19 questions = 35 marks


Questions and Answers
  • 1. 
    Enterprise involves which one of the following? Select one answer.
    • A. 

      A lack of ideas.

    • B. 

      Only providing a service.

    • C. 

      A willingness to take risks.

    • D. 

      Poor planning.

  • 2. 
    • A. 

      Rent of the business premises

    • B. 

      Insurance payments

    • C. 

      Raw materials used in production

    • D. 

      Advertising costs

    • E. 

      Packaging of the finished products.

  • 3. 
    Which three of the following documents are used in the recruitment process? Select three answers.
    • A. 

      Job Description.

    • B. 

      Business Plan.

    • C. 

      Person Description.

    • D. 

      Job Advert.

    • E. 

      Application Form.

    • F. 

      Cash Flow Forecast.

  • 4. 
    A business has the following cash flow information for one particular month: Opening balance: £5 000 Cash inflow: £7 000 Cash outflow: £14 000 What is the net cash flow for the business at the end of this month? Select one answer.
    • A. 

      –£16 000

    • B. 

      –£7 000

    • C. 

      £12 000

    • D. 

      £26 000

  • 5. 
    A business has the following cash flow information for one particular month: Opening balance: £5 000 Cash inflow: £7 000 Cash outflow: £14 000 What is the closing balance at the end of this month? Select one answer.  
    • A. 

      –£12 000

    • B. 

      –£2 000

    • C. 

      £9 000

    • D. 

      £16 000

  • 6. 
    Sonia Fletcher was fed up with taking orders from other people at work. She wanted personal satisfaction and financial security so decided to set up as a sole trader selling cakes made from organic ingredients. After a successful 18 months trading from a market stall she wanted to expand the business. Sonia needed to raise £25 000 to rent a shop and buy equipment. Which three of the following are the most likely reasons why Sonia decided to set up as a sole trader? Select three answers.
    • A. 

      She will benefit from limited liability.

    • B. 

      She could raise finance from selling shares.

    • C. 

      To have greater control within the business

    • D. 

      She would take all of the profits.

    • E. 

      She would have the ability to make her own decisions.

    • F. 

      It would involve greater risk.

  • 7. 
    Sonia Fletcher was fed up with taking orders from other people at work. She wanted personal satisfaction and financial security so decided to set up as a sole trader selling cakes made from organic ingredients. After a successful 18 months trading from a market stall she wanted to expand the business. Sonia needed to raise £25 000 to rent a shop and buy equipment. As a sole trader, which three of the following are long-term sources of finance for Sonia? Select three answers.
    • A. 

      Profit.

    • B. 

      Overdraft.

    • C. 

      Bank loan.

    • D. 

      Trade credit.

    • E. 

      Share capital.

    • F. 

      Personal savings.

  • 8. 
    Which one of the following is an example of a calculated risk for Sonia’s business? Select one answer.
    • A. 

      Sonia’s costs had risen by 30% in the past 6 months.

    • B. 

      Sonia has calculated her yearly income tax as £795.

    • C. 

      There is an 80:20 chance of Sonia’s business failing.

    • D. 

      Sonia has estimated that demand will rise by 10% over the next 6 months.

  • 9. 
    During Sonia’s first year of trading, interest rates increased from 3% to 5%. Identify three possible effects of this change on the business. Select three answers.
    • A. 

      A reduction in fixed costs due to lower repayments on her overdraft.

    • B. 

      A worsening net cash flow position.

    • C. 

      A rise in sales due to higher levels of consumer spending.

    • D. 

      A greater chance of rivals entering the market.

    • E. 

      A fall in sales due to lower levels of consumer spending.

    • F. 

      An increase in fixed costs due to higher repayments on her overdraft.

  • 10. 
    Sam Martinez is a driving instructor. Two years ago, he decided to set up on his own and researched being a sole trader or buying into a franchise. He decided to become a sole trader. Sam operates in a highly competitive market. He provides his customers with a computer print-out record at the end of each lesson, which highlights where the learner needs to improve. He also charges a price lower than his rivals for each lesson. Which two of the following methods are most likely to give Sam a competitive advantage? Select two answers.
    • A. 

      Providing high quality tuition.

    • B. 

      Operating as a sole trader.

    • C. 

      Providing a personalised service.

    • D. 

      Operating in a competitive market.

    • E. 

      Providing a service for the community.

  • 11. 
    Sam Martinez is a driving instructor. Two years ago, he decided to set up on his own and researched being a sole trader or buying into a franchise. He decided to become a sole trader. Sam operates in a highly competitive market. He provides his customers with a computer print-out record at the end of each lesson, which highlights where the learner needs to improve. He also charges a price lower than his rivals for each lesson. Which two of the following would have been possible advantages to Sam if he had decided to buy into a franchise? Select two answers.
    • A. 

      He would not have to pay any tax.

    • B. 

      He would have no stakeholders.

    • C. 

      Customer service would not be so important.

    • D. 

      A recognised brand name.

    • E. 

      Access to help and advice when running his business.

  • 12. 
    Vakas Shah was fed up with having his bicycle stolen; three times in the last year! He used his engineering background to develop ‘CycleSecure’, a lightweight but strong cable which secured the wheels and the frame of the bicycle. The design made it very difficult for anyone to steal a bicycle. Vakas hoped that his invention would be of interest to bicycle manufacturers. There were few similar products like this on the market. Which one of the following best describes the term ‘invention’? Select one answer.
    • A. 

      Identifying new products and new ways of making products.

    • B. 

      Identifying a gap in a market for a new product.

    • C. 

      New business ideas which are profitable.

    • D. 

      The process of transforming new ideas into products that can be sold.

  • 13. 
    • A. 

      Avoids having to ask the ‘what if?’ question

    • B. 

      Increases the calculated risk

    • C. 

      Generates competitive advantage

    • D. 

      Avoids the need for lateral thinking.

  • 14. 
    Vakas decided to protect his idea by use of a patent. What is one possible benefit of a patent to Vakas? Select one answer.
    • A. 

      Prevents another business from using his brand name.

    • B. 

      Provides the right of ownership of an invention or process.

    • C. 

      Is an insurance policy which provides protection from financial loss.

    • D. 

      Ensures he will not make a loss for 20 years.

  • 15. 
    Which two of the following were most important for Vakas in spotting a new business opportunity? Select two answers.
    • A. 

      Being able to produce his product cheaply.

    • B. 

      Recognising a need in the market-place.

    • C. 

      Being a keen cyclist.

    • D. 

      Knowing who his possible competitors were.

    • E. 

      Having a large amount of personal savings.

  • 16. 
    Charles Mitchell imports high quality pasta from Northern Italy for sale at his delicatessen in Suffolk. The exchange rate between the pound (£) and the euro (€) is important for Charles. He buys 100 kg of pasta every month. The price of pasta is €5 per kg. In April, the exchange rate is £1.00 = €1.25. How much does Charles have to pay to buy his pasta? Select one answer.
    • A. 

      £625

    • B. 

      £500

    • C. 

      £400

    • D. 

      £250

  • 17. 
    In May the exchange rate changed to £1.00 = €1.20. What effect would this have on Charles’s business? Select one answer.
    • A. 

      The cost of importing pasta from Italy stays the same.

    • B. 

      His net cash flow will improve.

    • C. 

      The euro price of pasta will rise.

    • D. 

      His import costs will rise.

  • 18. 
    • A. 

      The price of wheat will fall.

    • B. 

      Charles will have to pay more for his pasta.

    • C. 

      The cost of wheat will rise.

    • D. 

      The demand for wheat will fall.