Page 369 - Cambridge IGCSE Business Studies

Glossary

Shareholders’ equity (funds) alternative term for owner’s Team-working organising production so that groups of workers
equity, but can only be used by limited liability companies. complete the whole unit of work.
Shortlist a list of candidates who are chosen from all of the Tertiary sector firms that supply a service to consumers and

applicants to be interviewed for the job. other businesses.
Short-term fi nance loans or debt that a business expects to pay Theory of economic man the view that humans are only

back within one year. motivated by money.
Social benefi t the positive impact of a business decision on society. Total cost all the variable and fixed costs of producing the

Social cost the negative impact of a business decision on society. total output.
Social enterprise a business with social objectives that reinvests Trade bloc a group of countries that trade with each other and
most of its profits back into the business or into benefi ting are usually part of a free trade agreement.

society at large.
Trade payable the amount a business owes to its suppliers for
Sole trader a business that is owned and controlled by just one goods bought on credit.
person who takes all of the risks and receives all of the profi ts.
Trade receivable amount owed to a business by its customers
Span of control the number of subordinates reporting to each who bought goods on credit.
supervisor/manager.
Trade union an organisation of workers aimed
Specialisation people and businesses concentrate on what they
at improving pay and working conditions and providing
are best at.
other services, such as legal advice, for members.
Sponsorship payment by a business to have its name or
Trading account records revenue and costs of sales and is used
products associated with a particular event.
to calculate gross profi t.
Stakeholder an individual or group which has an interest
Two-way communication the receiver is allowed to respond to

in a business because they are affected by its activities
the message and the sender listens to the response.
and decisions.
Unincorporated business a business that does not have legal

Start-up capital the finance needed when first setting up

identity separate from its owners. The owners have unlimited
a business.
liability for business debts. 367
Subordinate an employee who is below another employee in the
Unique selling point the special feature of a product that sets it
organisation’s hierarchy.
apart from competitors’ products.
Supervisor an individual who checks and controls the work of
Unlimited liability if an unincorporated business fails, then the
subordinates.
owners might have to use their personal wealth to fi nance
Sustainable development a business activity is said to
any business debts.
be sustainable if it has a positive overall impact on the
environment and its stakeholders, ensuring its survival in Variable costs costs that change in direct proportion to output.
the future. Want a good or service which people would like, but is not

Target market individuals or organisations identified by a business essential for living.
as the customers or consumers of their products. Wholesaler a business that buys products in bulk from
Tariff a tax applied to the value of imported and exported goods. producers and then sells them to retailers.

Tax a charge/fee paid to the government on income, goods Working capital the capital needed to finance the day-to-day
and services. running expenses and pay short-term debts of a business.