Business
Domain 1 tests the business content a teacher must command: management functions, economics, accounting and finance, business law, entrepreneurship, and communication, plus how to teach those ideas with real workplace examples.
Core rules and concepts
- The accounting equation, Assets = Liabilities + Owner's Equity, anchors double-entry bookkeeping; every transaction keeps it balanced.
- Accrual accounting records revenue when earned and expenses when incurred; cash-basis records when cash moves.
- Management is commonly taught as planning, organizing, leading, and controlling.
- Microeconomics supplies supply, demand, elasticity, and market structures; macroeconomics covers GDP, inflation, and unemployment.
- A valid contract generally needs offer, acceptance, consideration, capacity, and legality.
Worked example
A product sells for $40, has variable cost $24, and fixed costs are $80,000. Contribution margin per unit is $40 − $24 = $16. Break-even units = fixed costs ÷ contribution margin = $80,000 ÷ $16 = 5,000 units. To earn a $20,000 target profit, required units = ($80,000 + $20,000) ÷ $16 = 6,250. The reasoning matters: only contribution margin covers fixed costs and then profit.
Traps that cost marks
- Confusing markup on cost with margin on selling price.
- Recording owner's withdrawals as a business expense instead of a reduction of equity.
- Mixing accrual and cash timing in the same income statement.
- Calling an advertisement or price list an offer when it is usually an invitation to treat.
- Forgetting that break-even ignores target profit.
For instruction, pair each rule with a short scenario and ask students to justify the classification, not just compute.