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

Answer: Revenue is the total amount of money a business earns from selling its goods or services before deducting expenses.

Question 2: What is a 'profit' in a business? Explain how it is different from revenue.

Answer: Profit is the money remaining after all expenses have been deducted from revenue. It differs from revenue because profit accounts for costs like wages, rent, and materials.

Question 3: List three common sources of income for a small business.

Answer: Sales of products or services, investments, and loans or bank overdrafts.

Question 4: Explain the purpose of a budget in a business.

Answer: A budget helps a business plan and control its income and expenses to ensure it remains financially healthy.

Question 5: Describe what an 'expense' is in business finance.

Answer: An expense is money spent by the business to operate, such as wages, rent, or supplies.

Question 6: Draw a simple diagram representing the flow of money in a business, including sales, expenses, and profit. Label each part clearly.

Answer: A flow diagram with three main parts: Sales (money coming in), Expenses (money going out), and Profit (the difference between sales and expenses).

Question 7: Sketch a basic 'cash flow' chart showing income and expenses over a month. Include at least two income sources and two expense categories.

Answer: A line or bar chart with time on the horizontal axis and money on the vertical axis, showing income rising from sales and other sources, and expenses from wages and bills.

Question 8: What is a 'bank loan' and how might a small business use it?

Answer: A bank loan is money borrowed from a bank that must be paid back with interest. A small business might use it to buy equipment or expand operations.

Question 9: Explain why a business might keep financial records and what can happen if they do not.

Answer: Financial records help track income and expenses, make decisions, and comply with laws. Without them, a business might overspend, face legal issues, or fail to see its true financial position.

Question 10: Identify two ways a business can increase its profit.

Answer: Increasing sales and reducing expenses are two ways to increase profit.

Question 11: Discuss the importance of understanding finance for someone wanting to start their own business.

Answer: Understanding finance helps an entrepreneur manage money effectively, make informed decisions, keep the business sustainable, and avoid financial difficulties.