BTEB HSC Business Management & Technology (HSC BMT) key terms

A business owned and run by one person, who keeps all profits and carries unlimited personal liability for the firm's debts. It is the simplest and cheapest form of business to register and dissolve.

A business formed by two or more people who agree to share capital, profits, losses and management duties, usually under a written deed. Partners normally bear unlimited liability unless registered as a limited liability partnership.

A business registered as a separate legal entity whose capital is divided into shares held by many owners. Shareholders' liability is limited to the value of the shares they hold.

The number of subordinates that one supervisor can manage effectively. A narrow span creates a tall hierarchy with close supervision; a wide span creates a flat structure with fewer management levels.

The process by which a manager assigns part of his or her work, decision-making power and responsibility to a subordinate, while remaining accountable to superiors for the results.

A system in which managers and employees jointly set specific, measurable goals for a period, then review performance against those agreed targets, linking appraisal and rewards to goal achievement.

A bookkeeping rule in which every transaction is recorded in at least two accounts, with equal debits and credits, so that the accounting equation stays balanced at all times.

The book of original entry where transactions are recorded first, in date order, showing the debit and credit accounts, the amounts and a short explanation before posting to the ledger.

A set of accounts, one for each item such as cash, sales or capital, where journal entries are posted and balances accumulate for preparing the trial balance and final accounts.

A statement listing all ledger account balances at a given date, with debits in one column and credits in another, used to check that total debits equal total credits.

The systematic allocation of the cost of a fixed asset over its useful life, reflecting wear, passage of time or obsolescence. It is an expense in the profit and loss account, not a cash payment.

An accounting method that records income when it is earned and expenses when they are incurred, regardless of when cash is actually received or paid.

Interest calculated only on the original principal for the whole period, using the formula I = P x R x T, with no interest ever added to the principal.

Interest that is added to the principal at the end of each period, so that later interest is earned on interest as well, making money grow faster than under simple interest.

The sum of a set of values divided by the number of values. It is the most common measure of central tendency, though extreme values can distort it.

A measure of how widely values spread around their mean. A small value means the data cluster closely; a large value shows greater variability or risk.

The level of sales at which total revenue equals total cost, so the business makes neither profit nor loss. It is found by dividing fixed costs by contribution per unit.

The quantity of a good or service that consumers are willing and able to buy at a given price in a given period, with other influences held constant.

The percentage change in quantity demanded divided by the percentage change in price. Values above one mean demand is elastic; values below one mean it is inelastic.

The value of the next best alternative given up when a choice is made. It measures the real sacrifice behind every economic decision, including business investment.

A sustained rise in the general price level of goods and services over time, which reduces the purchasing power of money and raises costs for businesses.

The total market value of all final goods and services produced within a country's borders in a given period, usually a year. It is the standard measure of national output.

Dividing a broad market into smaller groups of buyers with similar needs, habits or characteristics, so that product, price and promotion can be tailored to each group.

The combination of product, price, place and promotion decisions, often extended to people, process and physical evidence, that a firm blends to satisfy its target market.

The stages a product passes through - introduction, growth, maturity and decline - each requiring different pricing, promotion and distribution strategies to sustain sales and profit.

Direct communication between a salesperson and a prospective buyer, aimed at persuading the customer to purchase and at building a long-term business relationship.

The chain of intermediaries, such as wholesalers, agents and retailers, through which goods move from the producer to the final consumer.

A written document describing a venture's goals, target market, products, operations, management and financial forecasts, used to guide the owner and attract lenders or investors.

An investigation carried out before starting a project to judge whether it is technically possible, financially viable and acceptable in the market, and to identify major risks.

Money invested in new or growing businesses that carry high risk but show high growth potential, given in return for an ownership share, usually with management support.

A structured review of a firm's internal strengths and weaknesses together with its external opportunities and threats, used to shape strategy and business plans.

The process of spotting an opportunity, gathering resources and taking calculated risks to start and grow a business that creates value and employment.

A short internal written message used within an organisation to share information, instructions or decisions. It usually carries a heading showing To, From, Date and Subject.

The informal, unofficial network through which information and rumours spread among employees. It moves fast and can either support or damage formal communication.

An official written record of what was discussed, decided and assigned at a meeting, prepared by a secretary and later approved by the members.

Paying full attention to a speaker, receiving the message, noticing non-verbal cues and confirming understanding through questions and paraphrasing before giving a reply.

Software that arranges data in rows and columns of cells and recalculates formulas automatically, used for budgets, payroll, accounts and what-if analysis.

Software that stores, organises, retrieves and secures related data in tables, letting several users query and update records without duplication or confusion.

Buying and selling goods, services or information over the internet, including online retailing, electronic payments and business-to-business trade through websites and mobile apps.

A computer-based system that collects, processes and reports operational data so managers at every level can plan, control and make timely decisions.