business- 1

• Shareholders' equity can only be used by limited liability companies
• Social benefit

  The positive impact of a business decision on society
• Team-working organises production so that groups of workers complete the whole unit of work
• Sponsorship is a payment by a business to have its name or products associated with a particular event
• Sole trader


  A business that is owned and controlled by just one person who takes all of the risks and receives all of the profits
• Total cost

  All the variable and fixed costs of producing the total output
• Trade receivable is the amount owed to a business by its customers who bought goods on credit
• Subordinate


  An employee who is below another employee in the organisation's hierarchy
• Wholesaler


  A business that buys products in bulk from producers and then sells them to retailers
• Target market


  Individuals or organisations identified by a business as the customers or consumers of their products
• Unlimited liability


  If an unincorporated business fails, then the owners might have to use their personal wealth to finance any business debts
• Two-way communication


  The receiver is allowed to respond to the message and the sender listens to the response
• Specialisation


  People and businesses concentrate on what they are best at
• Shareholders' equity alternative term


  • Owner's equity
• Social enterprise


  A business with social objectives that reinvests most of its profits back into the business or into benefiting society at large
• Short-term finance loans or debt that a business expects to pay
• Sustainable development

  A business activity is said to be sustainable if it has a positive overall impact on the environment and its stakeholders, ensuring its survival in the future
• Start-up capital is the finance needed when first setting up a business
• Price elasticity of demand


  Measures by how much demand (sales) for a product changes when there is a change in its price
• Primary research


  The collection of first-hand data for the specific needs of the firm
• Trade payable is the amount a business owes to its suppliers for goods bought on credit
• Tax


  A charge/fee paid to the government on income, goods, and services
• Unique selling point

  The special feature of a product that sets it apart from competitors' products
• Theory of economic man

  The view that humans are only motivated by money
• Trading account records revenue and costs of sales and is used to calculate gross profit
• Price elastic demand


  The percentage change demand is greater than the percentage change in price
• Price leadership


  Smaller firms set their price based on the price set by the dominant firm in the industry
• Want


  A good or service which people would like, but is not essential for living
• Private limited company


  Often a small to medium-sized company
• Shortlist a list of candidates who are chosen from all of the applicants to be interviewed for the job
• Social cost

  The negative impact of a business decision on society
• Tertiary sector firms supply a service to consumers and other businesses
• Span of control

  The number of subordinates reporting to each supervisor/manager
• Stakeholder


  An individual or group which has an interest in a business because they are affected by its activities and decisions
• Working capital


  The capital needed to finance the day-to-day running expenses and pay short-term debts of a business
• Unincorporated business


  A business that does not have legal identity separate from its owners. The owners have unlimited liability for business debts
• Trade union


  An organisation of workers aimed at improving pay and working conditions and providing other services, such as legal advice, for members
• Supervisor


  An individual who checks and controls the work of subordinates
• Trade bloc

  A group of countries that trade with each other and are usually part of a free trade agreement
• Tariff


  A tax applied to the value of imported and exported goods