1. What are the two main causes of business decline?

A The business gives away a lot of its product to family and friends of the
owners and sells under cost
B Sales falter and enthusiasm of staff declines
C Lack of management expertise and undercapitalization
D The business becomes stuck in a steady state and you fail to conduct
research and development

2. At what point in the business life cycle is cash flow is a concern with a period of
constant outflow?

A Establishment
B Growth
C Maturity
D Post-Maturity

Refer to the following information to answer question 3

Light’s Cricket Bats Pty Ltd is a private company that specialises retailing Cricket
gear. They have established a plan for the future and developed visions and goals
for the business. A core customer base includes regulars, but the owner of the
business feels to maintain growth and achieve their initial goals they need to
diversify into retailing other sporting goods.

3. Which phase of the business life cycle does Light’s Cricket Bats Pty Ltd find itself?

A Establishment
B Growth
C Maturity
D Post-Maturity

4. Which of the following best describes involuntary cessation?

A The company’s shareholders vote to sell the company

B The owner closes the business due to an economic downturn
C A business declares that it cannot pay its debts any longer
D A court appoints a liquidator to convert the company’s assets into
cash
5. Which of the following terms applies to a business when someone has been
appointed by creditors or Courts to take charge of the affairs of the business but the
business may not necessarily be wound up?

A Voluntary Administration
B Bankruptcy
C Receivership
D Liquidation
6. Which of the following best characterizes the growth stage of the business life cycle?

A Development of new products, increased profits due to decreased

production costs, increased specialization of employees’ skills
B High failure rates, cash flow can be erratic, establishment of a
customer base
C Relative market share may plateau, management needs to redefine
the business’s objectives, customers may sense a degree of
impersonality
D Profits are low due to high fixed costs, informal management style
with decisions made ‘on the run’, high degree of uncertainty

7. Pym Tennis Racquets Pty Ltd is unable to continue trading as a business due to low
levels of cash flow. Which of the following would be the likely method for the business
to cease trading?

A The owner files for bankruptcy and then cancels its membership to ASIC
B An independent administrator is appointed and then the business’s
assets are liquidated
C The government fines the owners and the money is given to the
company’s debtors
D An accountant is brought into the business to horizontally integrate the
assets

8. Which of the following is responsible for monitoring market integrity and providing
consumer protection in areas such as payment systems?

A Australian Securities Exchange (ASX)

B Australian Chamber of Commerce and Industry (ACCI)
C Australian Council of Trade Unions (ACTU)
D Australian Securities and Investment Commission (ASIC)

9. In Australia, which industry has benefited the most, in terms of job growth, from the
changes in external influences?

A Primary
B Secondary
C Tertiary
D Manufacturing
10. Fruit sellers are an example of businesses in which of the following competitive
situations?

A Perfect competition
B Monopolistic competition
C Oligopoly
D Monopoly

11. In which stage of the economic cycle is a budget retail store likely to see the most
business activity?

A Upswing / recovery
B Boom / peak
C Downswing
D Recession / trough

12. Which of the following is true of the boom / peak stage of the business cycle

A Consumers have less money to spend

B Businesses are operating and or close to full capacity
C Sales and profit margins are reducing
D Governments are reducing the interest rate

13. Which term best describes the money a business receives as payment for its
products?

A Net Profit
B Interest
C Revenue
D Gross Profit

14. Which term refers to a good or service that can be bought or sold?

A Product
B Asset
C Liability
D Brand

15. Which of the following best describes an entrepreneur?

A Someone who manages the day to day operations of a business

B A person who is willing to take risks when starting a business venture
C A person with flair, creativity and ideas
D Someone who invests in businesses for a living
16. Mosh Jorris is employed in a local bank to assist customers with everyday banking
transactions. Which industry does he work in?

A Primary
B Secondary
C Tertiary
D Quaternary

17. Kassianos Furniture Removals is a business located in Sydney’s south. It employs 22

people. Based on the definition stated by the ABS, what size would this business be
classified as?

A Medium
B Micro
C Small
D Large

18. Which business entity is owned and operated by between two and twenty people?

A Sole Trader
B Private Company
C Partnership
D Government Enterprise

19. Which term best describes the document giving details of a company and inviting the
public to buy shares in it?

A Float
B Partnership Agreement
C Articles of Association
D Prospectus

20. Which of the following is a disadvantage of running a business as a sole trader?

A The owner can choose the hours they work

B The business does not pay tax on profits
C It is the simplest form of legal structure to operate
D The owner needs to perform a wide range of tasks