Nancy owned a corporate events company.
Sales revenue fell and her company failed.
This is an example of?
Select ONE answer:
- performance-related pay
- an increase in orders
- good management of cash flow
- changing market conditions
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 4
- Not correct – performance related pay is not a factor determining demand for the product/service as it rewards employee performance
- Not correct – an increase in orders would increase the chance of the company doing well as demand rose
- Not correct – good management of cash flow is more likely to help the business continue as it enables the monitoring of cash flow movements
- Correct – Accurate definition of changing market conditions – the factors that alter the supply and demand for goods/services or sales revenue, e.g. price x quantity or business income. Identifies what causes market conditions to change e.g. recession, competitors. Therefore a fall in sales revenue could be due to either a fall in units demanded/sold or a decrease in the selling price of the products/service. Which may mean that Sarah’s business may not be able to cover her costs and therefore fail.
This work is licensed under a Creative Commons Attribution 4.0 International License.
The Multiple Choice Questions Blog 
You must be logged in to post a comment.