Unit 2 Past Exam Questions 4

Identify one way a business makes money.

• Paying back a bank loan

• Selling products to customers

• Spending money on a new factory

• Buying material to make products

Identify one example of expenditure.

• Taking out a bank loan

• Receiving interest on savings

• Selling goods to customers

• Spending money on stock

What is the meaning of variable costs?

• Costs that change with the amount made/sold.

• Costs that do not change with the amount made/sold.

What is the meaning of loss?

• Costs are higher than revenues.

• Costs a lower than revenues.

Jasmine has a sweet shop.

Her total costs for last year were £87 927.

Her total revenue for last year was £134 259.

Calculate the profit made.

• Profit = Total revenue - total costs

  Profit = 134 259 - 87 927

  Profit = 46 332

• Profit = Total revenue - total costs

  Profit = 134 259 - 87 927

  Profit = 46 330

Identify one example of a cash inflow.

• Buying promotional leaflets

• Purchasing raw materials

• Selling used machinery

• Paying electricity bills

Alex owns a van that he uses to deliver sandwiches to customers. In which section of his statement of financial position (balance sheet) should Alex’s van be shown?

• Capital employed

• Working capital

• Current assets

• Non-current assets

Complete the formula for total cost.

Total cost = x + y

• X = Total variable cost

  Y = Total fixed cost

• X = Total variable cost

  Y = Total start-up cost

• X = Total operating cost

  Y = Total fixed cost

Caroline hopes to sell more of her fruit and vegetables to increase her gross profit.

Which two are other ways Caroline can improve her gross profit?

• Reduce the cost of sales.

• Increase the selling price.

• Reduce her fixed costs.

Identify two internal sources of finance.

• Retained profits from sales

• Leasing a piece of machinery

• Bank loan taken to pay for a shop

• Sale of fixed assets no longer user

• Offering shares for sale to investors