Category: Business Studies

In September 2021, the average price of petrol in the UK increased by 16% per litre over September 2020, which resulted in higher inflation.

This increase in the price of petrol may have had a significant impact on UK businesses, because ….

Select ONE answer:

1. quality of products
2. promotion of products
3. sales forecasting
4. branding

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 3

1. Not correct
2. Not correct
3. Correct – Inflation is an increase in the average price level/across the economy OR supply is the amount of goods provided or produced in a given time period at a certain price. Increased fuel prices will lead to increased transport costs. Costs of supplies may increase because a business may pass on increased costs of transport.
4. Not correct

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James Dyson made thousand’s of prototypes when designing his first bagless vacuum cleaner; all of them turned out to be failures.

This fact best demonstrates James Dyson’s …

Select ONE answer:

1. ethical stance
2. risk-taking
3. initiative
4. resilience

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

1. Not correct
2. Not correct
3. Not correct
4. Correct – Resilience means not giving up easily/determination to succeed. It is a key characteristic of a successful entrepreneur. Which, given the high number of prototypes this is evident of James Dyson’s resilience.

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The UK Government tries to encourage banks to increase lending to small businesses.

Which one of the following is true about bank loans given to small businesses?

They are ….

Select ONE answer:

1. often secured against assets
2. an internal method of finance
3. usually short term compared to overdrafts
4. a form of trade credit

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 1

1. Correct – A loan is a method of finance which is repaid over a specific period of time/medium or long term/with interest. Lending to small businesses can be risky. Therefore banks often require security/collateral to reduce the risk.
2. Not correct
3. Not correct
4. Not correct

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Lucy started her own range of hair products called Lucy’s Fine Hair. The Lucy No1 Hair Kit sold out within minutes of its launch in the UK.

This quick selling out of the hair kits was most likely caused by poor?

Select ONE answer:

1. quality of products
2. promotion of products
3. sales forecasting
4. branding

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 3

1. Not correct – it is more difficult to coordinate overall strategy as each hotel miNot correct – product quality must have been very good if all the hair kits have been purchased in minutes.
2. Not correct – customers must have been made aware of the hair kits in order to purchase them which resulted in all of the inventory selling out.
3. Correct – sales forecasting is an estimate of future sales.  Lucy’s Fine Hair must have underestimated the levels of demand for the No1 Hair Kits.  This resulted in Lucy’s Fine Hair not having enough inventory to meet demand in the UK.
4. Not correct – Lucy’s Fine Hair must have a strong brand image for the No1 Hair Kits to sell out so quickly.

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Stafford Hotels owns 10 hotels across the county of Staffordshire.

It uses a decentralised organisational structure to run these hotels. 

What is an advantage of using a decentralised organisational structure?

Select ONE answer:

1. There is a clear strategic direction
2. There is a greater consistency in the decisions made
3. There is an increased ability to achieve economies of scale 
4. There is an increased motivation amongst staff

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

1. Not correct – it is more difficult to coordinate overall strategy as each hotel might make different decisions and these are not made by the senior management.
2. Not correct – as more decisions are being made away from the centre of the business by local managers, it is inevitable that some consistency of service will be foregone between the 10 hotels.
3. Not correct – economies of scale are less easy to achieve as each of the 10 hotel controls what supplies are stocked or sold in their hotels reducing purchasing economies.
4. Correct – A decentralised organisational structure is where some decisions are made at headquarters and some are taken by local managers.  Each of the hotel managers is empowered to make decisions in each of the 10 hotels, reacting to local market changes.  This may result in staff feeling more valued leading to better customer service in the long term, and thus increased profits.

This work is licensed under a Creative Commons Attribution 4.0 International License.