BUSINESS STUDIES – TOPICAL TEST FORM – 5

NAME: _______________________________________
Fill in the Blanks
1. Business cost means the cost which incurred for running the business.
2. Fixed Cost are the costs which do not vary with the number of items sold or produced in the short term.
3. Variable Cost are the costs which vary with number of items sold or produced.
4. Total cost = Fixed Cost + Variable Cost.
5. Break Even Chart are the graphs which show how costs and revenues of a business change with sales.
6. Total revenue = Quantity Sold X Selling Price/ Unit.
7. BEP means Break Even Point.
8. Total costs = Total revenue means _Break Even Point.
9. In BEP chart, the vertical axis represents _Cost and Revenue.
10. In BEP chart, the horizontal axis represents Units of Production.
11. The variable cost is also known as _Direct Cost.
12. Variable cost = No. of Output X _Variable Cost/unit_.
13. Variable cost = Total Cost -- Fixed Cost.
14. _ Break Even Level of Production = Total fixed cost
Contribution/ Unit
15. _Direct Cost_ are those that can be directly related to or identified with a particular product or department.
16. _Marginal Cost_ are the extra cost a business will incur by producing one more unit of output.
17. _Indirect Cost_ are those costs which cannot be directly related to a particular product.
18. Indirect cost is often termed as _Overhead Cost_.
19. Average cost / Unit = Total Cost of Production
Total out put
20. _Economics of Scale_ are the factors that lead to a reduction in average coasts as a business increases in size.
21. Diseconomies of Scale are the factors that lead to an increase in average costs as a business grows beyond a
certain size.
22. _Forecasts_ are predictions of the future.
23. __Trends__ is an underlying movement or direction of data over time.
24. _Budgets_ are plans for the future containing numerical or financial targets.
25. The budget which contains budgets of all departments is known as _Master Budget_.
26. Variance = _Budgeted_ -- _Actual_.
27. _Accounts_ are the financial records of a firm’s transactions.

28. _Accountants_ are the professionally qualified people who have responsibility for keeping accurate accounts.

29. _Final Accounts__ are the accounts prepared at the end of the financial year.

30. __Purchase Order_ are the documents used to confirm the purchases from the seller.

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BUSINESS STUDIES – TOPICAL TEST FORM – 5

31. _Delivery Order__ are the documents used to confirm the delivery of the goods to buyer.
32. _Invoice____ are the documents used to remain for the payment form buyer.
33. _Receipts_ is the documents issued by the supplier when they received payment from buyer.
34. _Credit Note is the document issued by the supplier in order to correct the invoice if any error occurs.
35. __Cheque____ is the legal bank document used to make payment for the purchases and used instead of cash.
36. __Credit Card is the system that can make payment by swiping a card.
37. _Trading Accounts_ account shows how gross profit of a business is calculated.
38. Gross profit = _Cost of Goods Sold_ -- _Sales Turnover or Sales Revenue__
39. Cost of Goods Sold = _Opening Stock_ +_Purchases_--_Closing Stock__
40. Net Profit = Gross Profit -- _Operating Expenses_.
41. _Depreciation__ is the fall in the value of fixed asset overtime.
42. _Appropriations Accounts_ is the accounts shows how the profits are distributed after profit made in the business.
43. Retained Profit = Profit after Tax -- _Dividend Paid_.
44. Balance Sheet is _Total Net Assets_ = _Capital Employed_.
45. Working Capital = _Current Assets_ -- _Current Liabilities_.
46. Net Assets = _Fixed Assets_ + _Working Capital_.
47. Capital Employed = _Share Holders Fund_ + _Long Term Liabilities_.
48. _Profit & Loss Accounts_ account shows how net profit of a business is calculated.
49. _Assets__ are those items of value which owned by the business.
50. _Current Assets_ are those items of value which owned by the business within an accounting period.
51. _Fixed Assets_ are those items of value which owned by the business over many accounting period.
52. Total Assets -- Total Liabilities = _Owners Wealth or Equity or Shareholders Funds_.
53. _Long Term Liabilities__ are the long term borrowings which do not have to repay within one year.
54. _Current Liabilities_ are the amounts owed by the business which must be repaid within one year.
55. _Liquidity_ is the ability of a business to pay back its short-term debts.

56. Return on Capital employed = Operating Profit X 100

Capital Employed

57. Gross Profit Margin (%) = Gross Profit X 100

Sales Turnover

58. Net Profit Margin (%) = Net Profit X 100

Sales Turn over
59. _Current Ratio_ = Current assets
Current liabilities

60. _Acid Test Ratio_ = Current Assets -- Stocks

Current liabilities

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