Edexcel Business - Paper 1

Taxation

Money paid to the government from earnings, profits and financial transactions that are used to fund government spending

National Insurance contributions (NICs)

Money deducted from employees' salaries and from employers to pay for social costs, pensions, etc

Inflation

An increase in the price of goods and services over a period of time, usually expressed as an annual percentage

Income tax

Money paid to the government from employees' salaries

Corporation tax

Money paid to the government from company profits

Council tax

Money paid to local government to pay for local services

National Living Wage

Lowest wage allowed by law to be paid to people according to their age group

Redundancy

Losing your job due to reduced or changed business activity

Unemployment benefit

Money paid by the government to support unemployed people

Minimum wage

The lowest wage allowed to be paid to people by law

Luxury items

Consumer goods that are wants rather than needs

Basic items

Consumer goods that are needs rather than wants

Appreciation

An increase in the value of an asset over a given time

Depreciation

A decrease in the value of an asset over a given time

Strong currency

A national currency that has a high value in comparison to others

The economy

The combination of consumers, businesses, governments and organizations that produce, use, buy and sell all the products and services in a given area, region or country

Economic climate

Key factors including levels of employment, production, income and spending

Interest rate

A percentage representing the cost of borrowing

Improving economic climate

Levels of employment, production, income and spending decreasing

Weakening economic climate

Levels of employment, production, income and spending increasing

High interest rates

Good for savers, bad for borrowers

Low interest rates

Good for borrowers, bad for savers

Loan

A sum of money borrowed over a fixed term, at a fixed interest rate from a bank

Overdraft

A negative balance on a bank account, on which interest is usually charged

Consumer confidence

How positive the general public is about the economy reflected in increased spending

Consumer spending

The value of goods and services bought over a given time period

Income elastic products

Sales of these non-essential products fall when consumer incomes decrease

Income inelastic products

Sales of these essential products remain stable when consumer incomes decrease, or sales in dicount brands sometimes increase

Savings

Money deposited in banks which usually earn interest

Borrowing

Loans, mortgages, overdrafts and credit

Legislation

The laws that apply in a country

Employment law

Law that protects employees in the workplace

Consumer law

Law that protects customers when they buy goods and services

Consumer Rights Act (2015)

A law that sets out the rights and responsibilities of customers and retailers

Contracts of employment

A formal legal document that sets out an employee's working terms, pay and conditions

Equality Act (2010)

A law that sets out protection for certain groups, these protected characteristics are: age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership and pregnancy and maternity.

Health and Safety at Work Act (1974)

A law that sets out the duties of an employer to employees and the public to protect their health and safety

Discrimination

Treating a person differently or unjustly without cause, usually on the basis of race, gender and age

Trade Union

An association of workers in a particular trade or industry that works to improve the pay and conditions of its members, and negotiate on their behalf with owners

Part-Time

Usually when working hours are less than 35 hours per week

Full-Time

Usually when working hours are 35 hours or more per week

Salary vs wage

Salary is paid monthly and is set, wages are paid by the hour, usually paid weekly and depend on hours worked

GDPR

The General Data Protection Regulation, which sets out how businesses must handle, store and protect people's personal data.

Labeling of Food Regulations (1970)

A law which sets out what information must be put on food packaging

Weights and Measures Act (1985)

A law which sets out what units of measurement can be used on goods, either metric or imperial

The Consumer Protection from Unfair Trading Regulations (2008)

Regulations that protect the consumer from unfair practices and ban misleading and aggressive sales tactics

The Consumer Credit Act (1974)

A law that regulates credit card purchases and gives consumers protection when taking out loans or hire agreements

Data Protection Act (1998)

A law that covers information or data stored on a computer or an organized paper filing system about living people

Food Act (1984)

A law covering the safe preparation, labeling, storage and sale of food

Holiday Pay

Money paid to employees for days off and holidays

Compensation

Money paid to someone to make up for injury or disadvantage caused by another person or organization

Public liability insurance

The insurance that all business must have to insure against loss or injury suffered by customers on their premises

Employment tribunal

A formal hearing of a grievance or demand by an employee against an employer

Comply with

To follow, to obey

Act

A law

Law

A system of rules that apply to people in a country

Regulation

A way of making sure law is followed, usually applying to specific businesses or goods

Standard

Levels of quality that are usually set by businesses or industry bodies

Hours of work

The amount and the timing of an employees regular work

Overtime

Paid work done in addition to normal working hours

Software

Computer programmes made with code

Hardware

Physical computer equipment

Data

Information in digital form

Server

Large, powerful computers used to store data and run large scale programmes

ICT

Information and Communication Technology

Stakeholders

All individuals and organizations that affect a business, or are affected by it

Intranet

Employee only communication networks

Extranet

Employee plus other stakeholder networks

A.I.

Artificial Intelligence, software that can operate and function in similar ways to a human being

Software robot

A.I. driven computer programmes that can do simple tasks and administrative functions

The 'Cloud'

Software and storage on remote servers separate from a business' premises

e-Commerce

Any goods or services bought using the internet i.e Amazon

Apps

Small programmes used by mobile phones & tablets

e-tailer

A retailer that operates online without physical shops or premises

Stakeholder

Any person or group affected by a business

Stakeholders - Owners

People who have invested in the business or shareholders

Stakeholders - Employees

People who work in the business and are paid by the owners

Stakeholders - Suppliers

People or businesses that provide raw materials to the business

Stakeholders - Community

The people in a place where a business operates

Stakeholders - Government

The state or people who govern the country where a business operates

Stakeholders - Customers

The people who buy goods and services from a business

Stakeholders - Creditors

The people or suppliers that a business owes money to

Stakeholders - Managers

The people who run a business and direct its operation

Conflict of Aims

When two or more stakeholders have different objectives that are not compatible

Owners vs Customers

Higher profits vs Lower prices

Employees vs Managers

Higher wages vs Higher productivity

Owners vs Community

Profit and expansion vs Clean environment

Owners vs Government

Higher profit vs Higher taxes

Owners vs Creditors

Longer time to pay vs Faster payment

Business plan

What a business will do, how it aims to operate and produce and sell goods and services, including how it will finance itself

Organic Growth

Internal growth, when a business expands with its own resources

Budget

Predicted costs and expenses, sometimes including expected revenues

Financial backer

An investor who provides money for the business

Unit Costs

The average cost of producing a single product, or service

Fixed Costs

Costs that do not change with the number of products or services a business makes or provides

Variable Costs

Costs that change with the number of products or services a business makes or provides

Total Costs

Fixed costs plus variable Costs

Profit and Loss statement

A document showing revenues and costs over a fixed time, quarterly or annually

Cash Flow forecast

A document showing the timing and amounts of cash in and out of the business

Revenue

All money coming into the business from all activity