commerce

What is a sole trader?

A business owned and controlled by one person with unlimited liability.

What are the advantages of being a sole trader?

Easy to set up, complete control, and keeps all profits.

What are the disadvantages of being a sole trader?

Unlimited liability, no paid leave, and financial risk rests solely on the owner.

What is a partnership?

A business owned by two or more people who share profits and decision-making.

What are the advantages of a partnership?

More skills and knowledge, shared financial costs, and work can be shared.

What are the disadvantages of a partnership?

Unlimited liability, profits are shared, and partners can be responsible for debts.

What is a private company?

An incorporated business owned by shareholders with limited liability.

What are the key characteristics of a private company?

Separate legal entity, owned by shareholders, managed by directors, and shares not offered to the public.

What are the advantages of a private company?

Limited liability, separate legal identity, and easier to raise finance.

What are the disadvantages of a private company?

More expensive to set up and less direct control for individual owners.

What is a public company?

An incorporated company that can offer its shares to the general public.

What are the advantages of a public company?

Can raise large amounts of money, limited liability, and public trust.

What are the disadvantages of a public company?

Expensive to set up and owners may have less control.

What is a franchise?

A business model where a person buys the right to operate using an existing brand.

What are the advantages of a franchise?

Recognized brand, existing business model, and training and support.

What are the disadvantages of a franchise?

Franchise fees, less freedom, and reputation affected by other franchises.

What does incorporated mean?

The business is a separate legal entity from its owners.

What does unincorporated mean?

The business and owner are not separate legal entities.

What are the classifications of business size?

Micro, small, medium, and large based on factors like employees and revenue.

What is debt finance?

Money borrowed externally that needs to be repaid with interest.

What are the advantages of debt finance?

No ownership dilution and faster access to funds.

What are the disadvantages of debt finance?

Must repay the loan and interest, which can be risky.

What is equity finance?

Receiving money in exchange for part ownership of a business.

What are the advantages of equity finance?

No repayment required and risk is shared with investors.

What are the disadvantages of equity finance?

Owner gives up part of the business and profits may need to be shared.

What is crowdfunding?

Raising money from a large number of people, usually via the internet.

What are the types of crowdfunding?

Donation-based and reward-based funding.

What is WHS?

Work Health and Safety, focusing on keeping everyone safe in the workplace.

What is taxation?

Compulsory payment to the government, including income tax and company tax.

What are the four business functions?

Marketing, Operations, Human Resources, and Finance.

What is the purpose of financial records?

To inform decision making and fulfill legal requirements.

What are the three main financial records?

Income statement, cash flow statement, and balance sheet.

What does a cash flow statement show?

Cash coming into and going out of the business.

What is the balance sheet used for?

To show assets, liabilities, and owner's equity/capital at a particular point in time.

What is the formula for profit or loss?

Revenue − Expenses = Profit or loss.

Why are financial records important for a business?

They help make decisions, meet legal requirements, monitor performance, manage cash, and identify problems.

What are the four stages of the economic cycle?

1. Expansion, 2. Peak/Boom, 3. Contraction, 4. Trough/Recession.

What characterizes the expansion stage of the economic cycle?

Economic growth is increasing, with rising spending, sales, and profits, and decreasing unemployment.

What occurs during the peak/boom stage of the economic cycle?

The economy reaches its highest level of growth with high spending, wages, profits, and low unemployment.

What happens during the contraction stage of the economic cycle?

Economic growth decreases, with declining spending, sales, profits, and increasing unemployment.

What is the trough/recession stage of the economic cycle?

The lowest point of the economic cycle, characterized by low spending, profits, wages, and high unemployment.

What does SWOT analysis evaluate?

A business's situation by identifying strengths, weaknesses, opportunities, and threats.

What is Australia's system of government?

A representative democracy and constitutional monarchy.

What rights do Australian citizens have?

The right to vote, choose representatives, participate in the democratic process, and express political views within the law.

What responsibilities do Australian citizens have?

To understand how government works, participate in the political process, vote when required, and make informed decisions.

What does compulsory voting mean in Australia?

Eligible voters have a legal obligation to participate in elections.

What is a political party?

A group of people who share political ideas and policies, developing policies, choosing candidates, and campaigning.

What distinguishes independent representatives from party members?

Independents are not affiliated with a political party and represent their electorate independently.

How is government formed in Australia?

The party or coalition with majority support in the House of Representatives forms government, and its leader becomes Prime Minister.

What is the structure of Australia's Federal Parliament?

Bicameral, consisting of the House of Representatives (Lower House) and the Senate (Upper House).

What is the role of the government?

The party/coalition with majority support in the House of Representatives.

What is the role of the opposition?

The largest party/coalition not in government, questioning the government and proposing alternatives.

What are the three levels of government in Australia?

Federal, State, and Local government.

What does the Australian Constitution establish?

The legal framework for governance, including the Federal Parliament, government powers, and the High Court.

What is the separation of powers?

The division of government responsibilities into legislative (Parliament), executive (government), and judiciary (courts).

Why is the separation of powers important?

It prevents concentration of power in one group and creates checks on government power.

What is the process for a bill to become a law?

A bill is introduced, debated, voted on in both Houses, and receives Royal Assent to become an Act of Parliament.

What is statute law?

Law made by Parliament, which includes Acts passed regulating various matters.

What is preferential voting?

A voting system where voters rank candidates by preference, and votes are redistributed until a candidate wins.

What is a referendum?

A vote to change the Australian Constitution, requiring a double majority to pass.

What is a plebiscite?

A national vote to gauge public opinion on an issue, which does not change the Constitution.