BS+Glossary


 * Here is a little bit of active revision for you. Maybe you can do this in a group as a bit of fun. Here you have the definitions of important words but I have deleted the words themselves. See if you can add the words. They are in alphabetical order and the answers are given in the word document attached at the bittom of the page. You can also add other definitions yourself. Enjoy!**


 * **A**

the financial records of a firm’s transactions

when the value of a currency rises and it can buy more of another currency than before

the items of value which are owned by the business, e.g. land, buildings, equipment and vehicles

the total cost of production divided by total output


 * **B**

the record of the difference between a country’s exports and imports

shows the value of a firm’s assets and liabilities at a particular time

products are made in batches of a certain quantity, usually as orders come in

an additional amount of payment above normal pay as a reward for good work

when consumers keep buying the same brand again and again instead of choosing a competitor’s brand

graphs showing how costs and revenues of a business change with sales; they show the level of sales the business must make in order to break even

the level of sales at which total costs equal total revenue

plans for the future containing numerical or financial targets


 * C

a management structure in which most decisions are taken at the centre, or at higher levels of management

negotiation between one or more trade unions and one or more employers on pay and conditions of employment

the transferring of a message from the sender to the receiver, who understands the message

a pricing strategy where the product is priced in line with, or just below, competitors’ prices to try to capture more of the market

a legal agreement between employer and employee listing the rights and responsibilities of workers

the tax paid by limited companies on their profits

the valuation by a government agency of all social and private costs and benefits resulting from a decision

persons or businesses who have loaned money or supplied goods to a business without yet receiving payment

Assets such as cash, stocks and debtors which are held for only short periods of time


 * **D**

customers who owe money to the business

a management structure in which many decisions are not taken at the centre of the business but are delegated to lower levels of management

giving a subordinate the authority to perform particular tasks (NB it is the authority to perform a task which is being delegated – not the final responsibility)

the fall in the value of an asset over time

taxes paid directly from incomes, such as income tax or profits tax

the factors that lead to an increase in average costs as a business grows beyond a certain size

payments made to shareholders from the profits of a company after it has paid corporation tax when the production process is split up into different tasks and each worker performs one of these tasks. Also known as specialisation


 * **E**

when a country’s GDP increases – more goods and services are produced than in the previous year

the fact that there are unlimited wants but limited resources to produce the goods and services to satisfy those wants.

the factors that lead to a reduction in average costs as a business increases in size

the skill and risk-taking ability of the person who brings resources together to produce goods or services

a decision taken by a manager or company because of the moral code observed in that firm

the price of one currency in terms of another, e.g. £1 : $1.5

goods and services sold from one country to other countries


 * **F**

resources needed to produce goods or services

Assets which are likely to be kept by the business for more than one year.

costs which do not vary with the number of items sold or produced in the short term

large quantities of a product are produced in a continuous process. Also called mass production because of the large quantity of a standardised product that is produced

a business with a product or service that it does not want to sell to consumers directly; it appoints franchisees to sell the product

an agreement between countries to allow trade between them without tariffs and quotas


 * **G**

the total value of output of goods and services in a country in one year


 * **H**


 * **I**

goods and services bought in by one country from other countries

taxes added to the prices of goods. Tax payers pay the tax as they purchase the goods, e.g. value added tax (VAT)

Introduction given to a new employee, explaining the firm’s activities and procedures

the increase in the average price level of goods and services in an economy over time

advertising where the emphasis of advertising or sales promotion is to give full information about the product


 * J

a single product is made at a time, usually to the customer’s exact specifications

a production method that involves reducing or virtually eliminating the need to hold stocks of raw materials or unsold stocks of the finished product


 * K


 * **L**

all natural resources, including fields, forests, oil, gas, metals and other mineral resources

the margin of time between the date when stock is obtained and the date when it is sold on

techniques used by business to cut down on any waste and therefore increase efficiency, for example, by reducing the time it takes for the product to be developed and made available for sale

items owed by the business. Long-term liabilities are long-term borrowings which do not have to be repaid within one year. Current liabilities are amounts owed by the business which must be repaid within one year e.g.....

where the owners of a company cannot be held responsible for the debts of the company they own

when a company is forced out of business by its creditors because of its inability to pay its short-term debts

the ability of a business to pay back its short-term debts


 * M

where buyers and sellers come together to exchange products for money; this will not usually be a single location

the management process which identifies customer wants/needs and anticipates their future wants

the four factors that managers can vary to influence sales of a product – the four Ps: product, price, place, promotion

the market is divided up into groups of consumers who have similar wants

when the owners of two businesses agree to join their firms together to make one business

a business which controls all of the market for a product


 * N


 * O

the next best alternative given up by choosing another item

the right given to a business by a bank to spend more money than it currently has in its account


 * P

the physical container or wrappings for a product, also used for promotional purposes

a group or association of between 2 and 20 people who agree to own and run a business together

a pricing strategy where price is set lower than the competitors’ prices in order to be able to enter a new market

pay related to the effectiveness of the employee

advertising or promotion which is trying to persuade the consumer that they really need the product and should buy it

payment by quantity of product made

a pricing strategy where a high price is set for a new product on the market

the collection and collation of original data via direct contact with potential or existing customers. Also called field research

industry which extracts the natural resources of the earth

the costs of a business decision actually paid for by the business

company jointly owned by the people who have invested in it, they buy shares and become shareholders, have limited liability; the shares are not available to the general public

the stages a product will pass through from its introduction, through its growth until it is mature and then finally its decline

the output measured against the inputs used to create it

a pricing strategy where particular attention is paid to the effect that the price of a product will have upon consumers’ perceptions of the product

the largest type of organisation in the private sector, raises finance by selling shares which can be purchased by the general public

policies, strategies or measures taken to promote a good image for a company and/or its products


 * Q

when quality standards are set and applied throughout a business from design to components, materials, delivery, after-sales service and quality control procedures

when a product is sampled at regular intervals in the production process to check for quality and errors

a decline in a country’s GDP over 6 months or longer
 * R

when an employee loses their job because they are no longer needed, rather than due to any aspect of their work being unsatisfactory. Also called retrenchment


 * S

the use of information that has already been collected and is available for use by others. Also called desk research

industry which manufactures goods

the owners of a limited company

the gains to society resulting from a business decision. Also known as external benefits

the costs paid by the rest of society, rather than the business, as a result of a business decision. Also known as external costs because they are costs paid for by the rest of society ‘outside’ the business

a business owned by one person

the number of subordinates working directly under a manager

the raw materials, components or finished products a business keeps in order to make or sell a product

ensuring there is enough stock to satisfy the needs of a business

a form of industrial action where employees refuse to work


 * T

a group of workers join together to ensure their interests are protected


 * U

when people who are willing and able to work cannot find a job


 * V

costs which vary with the number of items sold or produced. They are often called direct costs as they can be directly related to or identified with a particular product


 * W


 * X


 * Y


 * Z