Question 1: Define the term 'income' in the context of a business.

Answer: Income is the money a business earns from selling goods or services.

Question 2: Explain what 'expenses' are in a business setting.

Answer: Expenses are the costs a business pays out to operate, such as rent, supplies, and wages.

Question 3: A small bakery sells cakes. The bakery's total income from sales in one month is £2,000. Its expenses for ingredients, rent, and wages total £1,200. Calculate the profit for that month.

Answer: Profit = Income - Expenses = £2,000 - £1,200 = £800.

Question 4: Describe why it is important for a business to keep track of its income and expenses.

Answer: Keeping track helps the business know if it is making a profit or loss, manage money effectively, and plan for the future.

Question 5: Sketch a simple bar chart showing the following monthly expenses for a small shop: rent (£500), stock (£300), wages (£700), and utilities (£200).

Answer: A bar chart with four bars, each representing one expense. The bars should be proportional to their amounts, with rent at 500, wages at 700, stock at 300, and utilities at 200.

Question 6: List three ways a small business can increase its revenue.

Answer: 1. Sell more products or services. 2. Increase prices. 3. Offer new products or services to attract more customers.

Question 7: Draw a simple budget plan for a small business that expects to earn £1,500 in sales and has estimated expenses of £900. Show the income, expenses, and expected profit.

Answer: A budget plan with income of £1,500, expenses of £900, and profit of £600 (income minus expenses).

Question 8: What is the purpose of a cash flow forecast for a business?

Answer: To predict how much money will come in and go out in the future, helping the business manage cash and avoid shortages.

Question 9: Identify two fixed costs and two variable costs in a cafe business.

Answer: Fixed costs: rent, insurance. Variable costs: ingredients, wages (if paid hourly).

Question 10: Sketch a simple pie chart showing the proportion of expenses for a small business, with 50% for wages, 30% for rent, and 20% for supplies.

Answer: A pie chart divided into three sections: half labeled 'Wages,' a third labeled 'Rent,' and a sixth labeled 'Supplies,' proportionally reflecting the percentages.