Year 11 - Term 1 Review Quiz

• Business
• Secondary Education

Year 11 - Term 1 Review Quiz

Year 11 Business

What is the definition of break-even?

1. The point at which total revenue exceeds total cost.
2. The point at which total revenue is zero.
3. The point at which total cost is zero.
4. The point at which total revenue equals total cost.

How is the break-even point calculated?

1. Total costs / Total revenue
2. Total revenue - Total costs
3. Fixed costs / (Selling price per unit - Variable cost per unit)
4. Variable costs / Selling price per unit

What does it mean if a business is operating above the break-even point?

1. The business is making a profit.
2. The business is making a loss.
3. The business is covering only its variable costs.
4. The business is not selling any products.

What is the significance of the break-even analysis for a business?

1. It helps in calculating the total fixed costs.
2. It is used to analyze the market competition.
3. It helps in determining the level of sales needed to make a profit.
4. It determines the selling price of the product.

What is the formula for calculating the margin of safety?

1. Actual sales - Break-even sales
2. Variable cost per unit x Sales volume
3. Fixed costs / Selling price per unit
4. Total costs - Total revenue

What does the contribution represent in break-even analysis?

1. The profit earned from each unit sold.
2. The amount by which sales exceed variable costs.
3. The total cost incurred.
4. The total revenue generated.

What is a disadvantage of relying solely on break-even analysis for decision making?

1. Assumes fixed and variable costs remain constant.
2. Neglects the impact of competition.
3. Considers changing market conditions.
4. Provides a precise forecast of sales.

What is the definition of economies of scale?

1. The process of reducing the scale of operations.
2. The cost advantages that enterprises obtain due to size.
3. The benefits of producing at a smaller scale.
4. The increase in average costs as production increases.

Which is a type of diseconomies of scale?

1. Technical economies
2. External economies
3. Managerial diseconomies
4. Financial economies

Explain economies of scale.

1. The total cost decreases as output decreases.
2. The cost per unit decreases as output increases.
3. The cost per unit increases as output increases.
4. The cost per unit remains constant regardless of output.

What are the benefits of economies of scale?

1. Lower average costs and increased efficiency.
2. Fluctuating average costs and inconsistent efficiency.
3. No impact on average costs and efficiency.
4. Higher average costs and reduced efficiency.

What is a potential consequence of diseconomies of scale?

1. Stagnant productivity and stable costs.
2. Reduced productivity and increased costs.
3. Fluctuating productivity and unpredictable costs.
4. Enhanced productivity and reduced costs.

What are the types of diseconomies of scale?

1. Operational
2. Financial
3. Managerial
4. Economical

Which type of diseconomy of scale is related to increased bureaucracy and communication problems?

1. Technological
2. Financial
3. Managerial

What is an example of financial diseconomies of scale?

1. Higher interest rates on borrowings
2. Improved efficiency in procurement
3. Decreased production costs

How do diseconomies of scale impact a business?

1. Have no effect on costs
2. Increase costs and reduce efficiency
3. Decrease costs and increase efficiency

What is the definition of cash flow in business studies?

1. The total revenue of a business.
2. The number of customers in a business.
3. The movement of money in and out of a business.
4. The amount of loans in a business.

How do you calculate net cash flow?

1. Total inflows - Total outflows.
2. Total revenue + Total expenses.
3. Total sales - Total costs.
4. Total assets - Total liabilities.

What does a positive cash flow indicate?

1. The business is losing customers.
2. The business is facing a financial crisis.
3. The business is overstaffed.
4. The business has more cash coming in than going out.

What can a business do to improve its cash flow?

1. Expand into unrelated industries.
2. Reduce unnecessary expenses and chase up late payments.
3. Increase employee salaries.
4. Ignore overdue invoices.

What is the opening balance in a cash flow statement?

1. The amount of cash and cash equivalents at the beginning of the period.
2. The total expenses for the period.
3. The net profit for the period.
4. The total revenue for the period.

How is the closing balance calculated in a cash flow statement?

1. Opening balance - Total expenses.
2. Opening balance + Net cash flow from operating activities.
3. Opening balance + Total revenue.
4. Opening balance - Net cash flow from operating activities.

What does a positive net cash flow from operating activities indicate?

1. The company experienced a net loss for the period.
2. The company generated more cash from its core business than it used.
3. The company relied heavily on external financing.
4. The company invested heavily in fixed assets.

Why is the cash flow statement important for a business?

1. It is primarily for internal record-keeping.
2. It is only required for tax purposes.
3. It helps assess the ability to generate cash and meet obligations.
4. It is used to calculate the company's market value.

What is a method to decrease net outflow in a business?

1. Negotiating better terms with suppliers
2. Increasing employee salaries
3. Expanding product range
4. Extending customer credit periods

Which action can contribute to increasing net inflow in a business?

1. Increasing advertising expenditure
2. Offering longer payment terms to customers
3. Hiring more staff
4. Reducing bad debts through effective debt collection

What can help reduce net outflow for a business?

1. Implementing cost-cutting measures
2. Launching a new marketing campaign
3. Increasing production capacity
4. Expanding into new markets

Which strategy can lead to a decrease in net outflow for a business?

1. Investing in research and development
2. Increasing distribution channels
3. Offering discounts to attract new customers
4. Consolidating and reducing inventory levels

What is the advantage of using retained profits as a source of finance?

1. Limited control over funds
2. No interest payments
3. Flexibility in use
4. High interest costs

What is a disadvantage of using bank loans as a source of finance?

1. Low risk of default
2. No repayment obligation
3. Security may be required
4. Interest payments

What is the main difference between internal and external sources of finance?

1. Internal sources come from within the business.
2. Internal sources are more costly.
3. External sources provide more control.
4. External sources come from outside the business.

Which of the following is an example of short-term finance?

1. Mortgage for business premises.
2. Issuing corporate bonds.
3. Bank loan for 10 years.
4. Trade credit from suppliers.

What is a benefit of external sources of finance?

1. Limited risk for the business.
2. Access to expertise and advice from investors.
3. Lower interest rates.
4. Easier to maintain control and ownership.

What is a common disadvantage of using retained profits as a source of finance?

1. Reduced financial risk.
2. No impact on ownership.
3. Limits the amount available for business expansion.
4. Higher interest costs.

Which factor is a consideration when making location decisions for a business?

1. Competitor locations
2. Labor availability
3. Government regulations
4. Market demand

What is a disadvantage of a business locating its production facilities in a remote area?

1. Higher transportation costs
2. Lower operating costs
3. Closer proximity to customers
4. Access to skilled labor

What type of production process involves large-scale, standardized manufacturing of identical products?

1. Mass production
2. Batch production
3. Flexible production
4. Customized production

What is a benefit of businesses using global sourcing for production?

1. Access to lower production costs
2. Limited access to technology
3. Higher transportation costs
4. Inefficient supply chain

What is the purpose of a cash flow forecast in business?

1. Analyzing customer satisfaction levels
2. Developing marketing strategies
3. Assessing financial stability
4. Predicting future cash inflows and outflows

What are the advantages of a cash flow forecast for businesses?

1. Planning for investments and expansions
2. Measuring brand awareness
3. Identifying potential cash shortages
4. Increasing employee salaries

How can a business location decision lead to disadvantages?

1. Enhanced customer experience
2. Improved product quality
3. Higher operating costs
4. Limited access to skilled labor

What is a disadvantage of inaccurate cash flow forecasting?

1. Improved customer retention
2. Higher employee morale and motivation
3. Missed opportunities for growth
4. Cash flow problems and financial instability

What is the definition of working capital?

1. The capital needed for day-to-day operations.
2. The fixed assets of a business.
3. The initial investment in a business.
4. The profit made from a business venture.

Which of the following is an example of capital expenditure?

1. Marketing and advertising costs
2. Purchasing new machinery
3. Paying salaries to employees
4. Buying office supplies

What is revenue expenditure?

1. Income generated from sales
2. Investment in long-term assets
3. Profit after tax
4. Costs incurred in the day-to-day running of a business.

What is the difference between revenue and profit?

1. Revenue is the income before taxes, while profit is the income after taxes.
2. Revenue is the total income generated, while profit is the difference between total revenue and total costs.
3. Revenue is the total sales income, while profit is the amount of money left after expenses.
4. Revenue is the amount of money left after expenses, while profit is the total sales income.

What does the term liquidation mean in business?

1. The process of selling a company's assets to repay outstanding debts, before company closure.
2. The expansion of a company's operations.
3. The reorganization of a company's structure.
4. The acquisition of a company by another.

What does liquidity refer to in finance?

1. The total debt of a company.
2. The ability to convert assets into cash quickly.
3. The fixed expenses of a company.
4. The long-term investments of a company.

Define overhead in business terms.

1. The initial investment in a business.
2. The net profit of a business.
3. The total revenue of a business.
4. The ongoing expenses of operating a business not directly involved in producing a product.

What is the definition of insolvency?

1. The amount of money a company makes.
2. The profit made by a company.
3. The total assets of a company.
4. A company's inability to pay its debts.

What do you need to focus on?

Make a note of 3 areas that you need to focus more attention on before the assessment next Wednesday