business multiple choice

 🔹 SECTION 1: BUSINESS FUNDAMENTALS

 1. Types of Businesses

 Service Business: Provides services that aren't physical products.

  Examples: Hair salons, banks, tutors.

 Merchandising Business: Buys finished products and resells them for profit.

  Examples: Walmart, Best Buy.

 Manufacturing Business: Uses raw materials to produce finished goods.

  Examples: Toyota, General Mills.

 Non-Profit Organization: Exists to serve a social cause, not to make profit.

  Examples: Red Cross, Habitat for Humanity.

 Online Business: Operates mainly through the internet.

  Examples: Amazon, Shopify stores.

 Brick-and-Mortar Business: Has a physical location for sales.

  Examples: Local grocery store, mall shop.

 2. Types of Business Ownership

 Sole Proprietorship: One person owns and operates the business. They have full control but also full (unlimited) liability.

  Example: Local bakery.

 Partnership: Two or more people share ownership and responsibilities.

  Example: Law firm.

 Corporation: A separate legal entity. Offers limited liability but profits are taxed twice (corporate + personal taxes).

  Example: Apple Inc.

 Franchise: A franchisee pays to operate using a larger brand’s name and systems.

  Example: McDonald's.

 Cooperative: Owned by a group of individuals for mutual benefit. Decisions are often democratic.

  Example: MEC (Mountain Equipment Co-op).

 3. Economic Resources (Factors of Production)

 Natural Resources: Materials found in nature used in production (e.g., oil, water, minerals).

 Human Resources: People’s labour, skills, and knowledge.

 Capital Resources: Equipment, machinery, tools, and money used in production.

 Entrepreneurship: The drive and risk-taking to combine resources and create businesses.

 4. Types of Compensation

 Wages: Pay based on hourly work.

 Salary: A fixed annual amount divided into pay periods.

 Commission: Earnings based on sales made.

  Example: Real estate agents.

 Bonuses: Additional pay based on performance or results.

 Benefits: Non-wage perks such as vacation pay, dental plans, and health insurance.

 🔹 SECTION 2: PRODUCTION & ACCOUNTING

Economic graphs 

 5. Production Processes

All production involves:

 Inputs (resources) → Processes (activities) → Outputs (finished goods/services)

Types of Production:

 Job Production: One-of-a-kind or custom products.

  Example: Wedding cakes.

 Batch Production: Items made in groups or batches.

  Example: Clothing line.

 Flow Production: Continuous, mass production.

  Example: Car assembly lines.

 6. Accounting Basics

Key Terms:

 Assets: What the business owns (e.g., cash, equipment, accounts receivable).

 Liabilities: What the business owes (e.g., loans, accounts payable).

 Owner’s Equity (OE): The value left after liabilities are subtracted from assets.

 Revenue: Money earned from business operations.

 Expenses: Costs involved in earning revenue.

 Drawings: When the owner takes money out for personal use.

Equations:

 Basic: Assets = Liabilities + Owner’s Equity

 Expanded: Assets = Liabilities + OE + Revenues – Expenses – Drawings

Financial Statements:

 Balance Sheet: A snapshot of financial position at a point in time.

 Income Statement: Shows profit or loss over a period.

  Formula: Revenue – Expenses = Net Income or Net Loss

 🔹 SECTION 3: HUMAN RESOURCES

 7. Key HR Functions

 Recruitment: Attracting and selecting suitable candidates.

 Onboarding and Training: Teaching new employees job-specific tasks.

 Performance Appraisals: Reviewing employee contributions and setting goals.

 Compensation and Benefits: Providing wages, bonuses, and benefits.

 Termination: Can be voluntary (resignation, retirement) or involuntary (firing, layoffs).

 🔹 SECTION 4: FINANCIAL LITERACY

 A. Taxes

 Canada uses a progressive tax system: Higher income = higher tax rate.

 Calculate tax using brackets:

  Tax = Income in bracket × Rate

 B. Investment Types

 Savings Account: Low risk and return. Easy to access.

 GICs (Guaranteed Investment Certificates): Low risk, locked in for a set term.

 Bonds: Loans to governments or companies. Moderate risk and return.

 Stocks: Ownership in a company. Higher risk, potential high reward.

 Mutual Funds: Group investment managed by professionals. Varies in risk.

 C. Credit Cards

 Always pay the full balance to avoid interest (usually 18%–25%).

 Poor credit card management lowers your credit score.

 D. Banking Tools

 Chequing Account: For daily use like spending and withdrawals.

 Savings Account: Earns interest over time.

 GICs: Locked-in savings with guaranteed return.

 TFSA (Tax-Free Savings Account): Earn income/gains without paying tax on it.

 RRSP (Registered Retirement Savings Plan): Tax-deferred savings for retirement.

 🔹 SECTION 5: HOME OWNERSHIP & MORTGAGES

 9. Home Purchase

 Down Payment: Minimum of 5% in Canada.

 Equity: The portion of the home you own (home value – mortgage).

 Debt: What you still owe.

 Capital Appreciation: Increase in home value over time.

 10. Mortgages

 Fixed Rate Mortgage: Interest rate stays the same for the term.

 Variable Rate Mortgage: Interest rate can change with the market.

 Open Mortgage: Can be paid off early without penalty.

 Closed Mortgage: Has penalties for early repayment.

 Term: Length of the current mortgage agreement (e.g., 5 years).

 Amortization Period: Total time to pay off the mortgage (e.g., 25 years).