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level: Nature of Business

Questions and Answers List

level questions: Nature of Business

Question	Answer
term used when values can be calculated in units of money; records can be kept in units; a function of money	Unit of Account
term used for when money can be stored and still retain its value; a function of money	Store of value
the value of a debt can be calculated in money now and can be paid back in terms of this value; a function of money	Standard for deferred payments
a financial instrument of payment which gives the holder access to goods and services on credit	Credit Card
involves the movement of funds from one account to another electronically	Electronic Money Transfer (EMT)
the means through which a payment is made e.g-notes,coins,cheques,etc.	Instrument of Exchange
a person making out a bill of exchange, such as a cheque ordering the payment of funds	Drawer
usually the bank responsible for following the drwer's instruction to transfer the funds to the payee	Drawee
a person entitled to payment by the drawee as a result of instructions made by the drawer	Payee
enables the transfer of money from one account to another using telephone communications	Tele-banking
the process of buying and selling, usually through a website	E-commerce
Consists of small, medium and large-scaled businesses that is set up principally to earn a profit	Private Sector
Consists of enterprises owned and ran by the government	Public Sector
Movement from the Public Sector to the Private Sector	Privatisation
Movement from the Private Sector to the Public Sector	Nationalisation
A form of business that comprises of one person running a business(although he or she may still employ a large amount of people)	Sole Trader
A form of business that is jointly operated between two or more individuals	Partnership
A type of partnership in which each partner is involved in the management of the business	Ordinary or "Unlimited" Partnership
A type of partnership in which partners are not involved in the management or the day-to-day running of the business	Sleeping or "Limited" partnership
A form of business organization formed by groups with similar objectives and/or interests	Co-operatives
A form of business; A group of companions (shareholders) who have come together to set up a business, which is considered a separate legal entity	Company
The type of company where it is privately owned by founders,managers,owners,etc.	Private Companies
the type of company where have in part or in whole been "sold" to the public,who become investors in the business	Public Company
A type of business organization that has been authorized to deal in another business organization's products and/or services in return for an agreed fee	Franchise
Pays the franchise to trade in a given area	Franchisee
an established business with a well-known name and products or services who grants the licence to the franchisee	Franchisor
Producing enough foods and services to live, but without making a significant surplus to build for the future	A type of economic system; Traditional (Subsistence)
An economy in which the government creates the plans for the production of goods, jobs and how goods are allocated between citizens of the country	Command or planned(socialist)
An economy in which the which the decisions about how to produce, and what to produce are made by private businesses and consumers	Free Market or Capitalist
An economy that combines elements of command (state) planning with the free market	Mixed (public and private)
An individual or group that has direct interest in the decision that a business makes	Stakeholders
A stakeholder that wishes for the business to make profit and flourish; also oversees, provide start-up capital and provides the vision for the business	Owner
A stakeholder that will want to work for the business and will want the business to provide steady employment	Employees
Stakeholders who desire a steady supply of their favourite products at affordable prices and good quality; their role is to purchase goods or services	Consumers
Stakeholders who wants to deal with businesses that make large and regular orders to them and pay promptly; thier role is to provide businesses with material	Suppliers
Stakeholders that consists of the people that a business comes into contact with in the localities in which it operates; their role is to provide a workforce	Community
Stakeholders that has a key in ensuring that business decisions impact fairly on all stakeholders; its role is to treat business fairly and ensure that the business continues to supply the goods and services needed	Government
Individuals withing an organization who have a special interest in its activities and how well it performs	Internal Stakeholder
Individuals who are not employed by,or members of, an organisation but who have a vested interest in its activities and its financial performance	External Stakeholders
Concealing the origins of illegally obtained money so that it appears to have come from a legitimate source	Money Laundering
A set of values which describe how a company and its people are expected to behave in a moral way	Code of ethics
an organization that provides goods or services, or both, with the aim of making a profit	Business
That key individual who undertakes a risk by investing money, time, and energy in the building of a business with the aim of making a profit	Entrepreneur
tangible items that a business organization or industry produces for customers or consumers and are usually exchanged for money or service	Goods
intangible tasks or activities that are undertaken by businesses to satisfy the needs of customers or consumers on a whole	Services
individuals who purchase goods that are produced or use the services provided by the company	Consumers
individuals or organizations that produce goods for customers or consumers as a whole	Producers
an article or item offered for exchange in the marketplace	Commodity
the situation in which goods and services are bought and sold commercially on the local or international market	Trade
the direct exchange of goods or service for other goods or service	Barter
any commodity that can be used as a medium of exchange, a unit of account, a store of value, and a standard for deferred payment (anything that possesses the stated functions)	Money
1) indivisibility 2) storage 3)unavailability of some required items that nobody produced 4)having no standard exchange rate	Disadvantages of Bartering
1) people can access goods that they do not produce themselves 2) people can specialize in producing one or a small number of goods 3) surplus production can be traded 4) There is no need for money	Advantages for Bartering
term used when money is generally accepted as a form of payment	Medium of Exchange
the items are valued because of it's relatively scarce supply	Characteristic of money; scarcity
when an item is accepted as payment then it is money	Characteristic of money; Acceptability
the item is easy to carry around	Characteristic of money; Portability
the item is hard-wearing and long lasting	Characteristic of money; Durability
the item consists of units so large it can be broken down into smaller units	Characteristic of money; Divisibility
two people who each wants what the other has to offer	Double coincidence of wants
A written order by one party in an exchange (the drawer) to another (the drawee) to pay a given sum of money on the date set out the order, in payment of goods recieved	Bill of Exchange