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

Answer: Revenue is the total income generated by a business from selling goods or services before deducting expenses.

Question 2: Explain the difference between fixed costs and variable costs with examples.

Answer: Fixed costs are expenses that do not change with the level of production or sales, such as rent or salaries. Variable costs vary directly with the level of production or sales, such as raw materials or packaging costs.

Question 3: A small cafe earns £5,000 in sales revenue last month. If their costs of ingredients and wages total £3,000, what is their profit for the month?

Answer: Profit = Revenue - Costs = £5,000 - £3,000 = £2,000.

Question 4: Describe what a cash flow statement shows about a business.

Answer: A cash flow statement shows the inflows and outflows of cash within a business over a specific period, indicating whether the business has enough cash to operate.

Question 5: Identify two reasons why a business might need to seek additional finance.

Answer: A business might need additional finance to expand operations, purchase new equipment, cover cash flow shortages, or develop new products.

Question 6: Draw a simple bar chart illustrating the following monthly sales figures for a business: £1,200 in January, £1,500 in February, £1,300 in March, and £1,700 in April.

Answer: A bar chart with four bars, each representing a month, with heights proportional to the sales figures. The bar for February and April should be the tallest, with January and March slightly shorter.

Question 7: Sketch a basic pie chart showing the proportion of expenses in a small business: 50% for wages, 30% for stock, and 20% for utilities.

Answer: A pie chart divided into three sections: a half section labeled 'Wages', a third labeled 'Stock', and a sixth labeled 'Utilities'.

Question 8: Explain the concept of break-even point in business finance.

Answer: The break-even point is the level of sales at which total revenue equals total costs, meaning the business makes no profit or loss.

Question 9: Identify three sources of finance that a new business could use to start up.

Answer: Personal savings, bank loans, investments from family or friends, or government grants.

Question 10: Describe how a business might use a budget to control its spending.

Answer: A business uses a budget to plan expected income and expenses, monitor actual spending against the plan, and make adjustments to stay within financial limits.