Edexcel GCSE Business sample questions and answers (1BS0)
Guide overview All 10 topics Sample questions Papers and weighting Look inside Questions and answers
49 sample questions and answers
Taken from every topic of Edexcel GCSE Business, specification 1BS0. The full guide has 672.
Paper 1
Enterprise and Entrepreneurship
46 questions in the guide, across 3 subtopics. More from this topic
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The dynamic nature of business
Why might a change in what consumers want create an opportunity for a new business?
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New tastes create demand that existing firms may not yet meet. Demand for plant-based food rose, opening a market for vegan brands. -
The dynamic nature of business
Give one advantage and one disadvantage of an original business idea.
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An original idea may face no direct competitors at first, so it can charge a higher price. An untested idea carries more risk because demand is unknown. -
Risk and reward
What is meant by reward in business?
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Reward is the benefit an entrepreneur gains for taking a risk. Rewards include business success, profit and independence. -
Risk and reward
How does the balance of risk and reward affect whether someone starts a business?
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A person starts a business when the expected reward seems worth the risk. A high chance of loss with little reward puts people off. -
The role of business enterprise
Name the five ways a business can add value.
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A business can add value through convenience, branding, quality, design and a unique selling point.
Paper 1
Spotting a Business Opportunity
76 questions in the guide, across 5 subtopics. More from this topic
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Customer needs
What is meant by convenience as a customer need?
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Convenience means a product is easy to get and use, saving the customer time and effort. Late opening, home delivery and online ordering all add convenience. -
Customer needs
Why might a business struggle to meet every customer need at the same time?
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Higher quality and wider choice usually raise costs. Higher costs push up the price, so the business must decide which needs matter most to its customers. -
Purpose and methods of market research
What is primary research?
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Primary research is new information collected first-hand by the business for its own purpose. Primary research is also called field research. -
Purpose and methods of market research
What is secondary research?
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Secondary research uses information that already exists, collected by someone else for another purpose. Secondary research is also called desk research. -
Market research data and its reliability
Give an example of a closed question and the type of data it produces.
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A question asking how many coffees someone buys each week gives quantitative data. The answers can be counted and averaged.
Paper 1
Putting a Business Idea into Practice
68 questions in the guide, across 4 subtopics. More from this topic
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Business aims and objectives
Why is survival the main objective for most new businesses?
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Many start-ups close in their first years because of weak sales or cash shortages. A business must survive before it can grow or make large profits. -
Business aims and objectives
What is a social objective?
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A social objective aims to benefit society or the environment rather than just make money. A café might aim to employ young people leaving care. -
Business revenues, costs and profits
A T-shirt printer sells 150 shirts at £8 each. Its fixed costs are £1,200 and its variable costs are £3 per shirt. Calculate its profit or loss.
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The printer makes a loss of £450. Revenue is £1,200 and total costs are £1,650. -
Business revenues, costs and profits
How is the break even point shown on a break even diagram?
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The break even point is where the total revenue line crosses the total costs line. A line down to the output axis shows the break even output. -
Cash and cash flow
What is the difference between cash and profit?
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Cash is the money a business has available at a point in time. Profit is the amount by which revenue exceeds costs over a period.
Paper 1
Making the Business Effective
75 questions in the guide, across 5 subtopics. More from this topic
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Business ownership and limited liability
Give two advantages of being a sole trader.
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A sole trader is easy and cheap to set up. The owner keeps all the profit and makes every decision. -
Business ownership and limited liability
Give two advantages of a private limited company.
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Shareholders have limited liability, so their personal assets are safe. The company can raise capital by selling shares to family, friends or investors. -
Franchising as a start-up option
Why is a franchise less risky than starting an independent business?
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The franchise uses a brand and product that customers already know and trust. The business model has already been tested in other locations. -
Franchising as a start-up option
Why might an entrepreneur who values independence avoid franchising?
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A franchisee must follow the franchisor's rules on products, prices and appearance. The owner has little freedom to use their own ideas. -
Business location
Why might a business choose to locate near its competitors?
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A cluster of similar businesses attracts customers who want to compare. Restaurants and jewellers often gather in the same street for this reason.
Paper 1
Understanding External Influences on Business
78 questions in the guide, across 5 subtopics. More from this topic
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Business stakeholders
What do customers and suppliers want from a business?
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Customers want good-quality products at fair prices. Suppliers want regular orders and to be paid on time. -
Business stakeholders
How are employees affected by business decisions?
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A decision to expand can create jobs and promotions. A decision to cut costs may lead to redundancies or smaller pay rises. -
Technology and business
What is digital communication?
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Digital communication is sending information electronically, such as by email, messaging and video calls. Digital communication is fast and cheap. -
Technology and business
How can technology reduce a business's costs?
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Online selling avoids the cost of shop premises. Automated systems can cut staff costs and reduce errors. -
Legislation and business
What rights does a consumer have when buying a service?
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A service must be carried out with reasonable care and skill. If no time or price was agreed, the work must be done in a reasonable time for a reasonable price.
Paper 2
Growing the Business
79 questions in the guide, across 5 subtopics. More from this topic
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Organic and inorganic business growth
How can technology help a business reach new markets?
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A website with online payment lets a business sell to customers far beyond its local area. Social media can promote the business to new groups cheaply. -
Organic and inorganic business growth
What is a takeover?
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A takeover is when one business buys enough shares in another to gain control of it. A takeover is hostile if the target's directors oppose it. -
Public limited companies and finance for growth
What is stock market flotation?
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Flotation is when a company first offers its shares for sale to the public on a stock exchange. A private limited company must re-register as a plc before it can float. -
Public limited companies and finance for growth
What is sale and leaseback?
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Sale and leaseback is selling a property and then renting it back from the buyer. The business raises a large sum but keeps using the building. -
Changes in business aims and objectives
How can legislation lead a business to change its objectives?
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A new law can raise costs or ban a product, forcing a change of direction. The UK soft drinks levy of April 2018 led many makers to cut the sugar in their drinks.
Paper 2
Making Marketing Decisions
78 questions in the guide, across 5 subtopics. More from this topic
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Product design, life cycle and differentiation
What is the product life cycle?
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The product life cycle shows the stages a product passes through from launch to withdrawal. Sales and profit change at each stage. -
Product design, life cycle and differentiation
What is an extension strategy?
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An extension strategy is an action that lengthens a product's life by delaying its decline. An extension strategy is usually used in maturity or early decline. -
Price and pricing strategies
What is competitive pricing?
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Competitive pricing is setting a price close to that of rival products. Competitive pricing suits markets where products are similar, such as petrol. -
Price and pricing strategies
How can technology let a business change its prices as demand changes?
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Online systems let a business update prices instantly, raising them when demand is high and cutting them when it is low. Airlines and hotels price this way. -
Promotion strategies and technology
What are the risks of sponsorship?
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Sponsorship can be very expensive, and its effect on sales is hard to measure. Bad behaviour by a sponsored team or star can damage the brand.
Paper 2
Making Operational Decisions
62 questions in the guide, across 4 subtopics. More from this topic
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Business operations and production processes
What are the advantages and disadvantages of batch production?
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Batch production offers some variety while keeping unit costs below those of job production. Machines stand idle while they are reset between batches. -
Business operations and production processes
Which production process would suit a small bakery making several kinds of bread each day?
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Batch production suits the bakery, as it can make one type of loaf and then switch to another. Demand for each type is too small for flow production. -
Working with suppliers
What is the reorder quantity?
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The reorder quantity is the amount of stock ordered each time. The reorder quantity usually equals the maximum stock level minus the buffer stock. -
Working with suppliers
What is procurement?
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Procurement is finding and buying the goods and services a business needs from suppliers. Good procurement secures the right quality at the right price and time. -
Managing quality
What are the drawbacks of quality assurance?
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Quality assurance needs staff training and investment in systems, which is costly to set up. Standards may slip if staff are poorly trained.
Paper 2
Making Financial Decisions
32 questions in the guide, across 2 subtopics. More from this topic
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Profit, profit margins and ARR
What does the gross profit margin measure, and how is it calculated?
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The gross profit margin shows the percentage of sales revenue left after cost of sales. Gross profit margin (%) = gross profit ÷ sales revenue × 100. -
Profit, profit margins and ARR
How can a business improve its net profit margin?
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A business can cut operating expenses such as rent, or reduce its borrowing to pay less interest. Higher prices or cheaper supplies also lift the margin by raising gross profit. -
Understanding business performance
What is marketing data?
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Marketing data is information about how customers respond to a business's products, prices and promotions. Market research results, sales by product and customer feedback are examples. -
Understanding business performance
How can financial data inform a decision to expand?
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Profit figures show whether the business can afford expansion from retained profit. Cash flow forecasts show whether the business could meet loan repayments.
Paper 2
Making Human Resource Decisions
78 questions in the guide, across 5 subtopics. More from this topic
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Organisational structures and communication
What are the advantages and disadvantages of a flat structure?
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A flat structure gives fast communication and lower management costs. Managers may be overstretched, and there are fewer chances of promotion. -
Organisational structures and communication
Why is effective communication important in a business?
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Effective communication ensures staff understand their tasks and the business's goals. Clear communication reduces mistakes and keeps staff motivated. -
Different ways of working
What right to request flexible working do UK employees have?
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Since April 2024, UK employees can request flexible working from their first day in a job. An employer must consider the request but can refuse it for a sound business reason. -
Different ways of working
Why might a small marketing agency use freelance designers?
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Freelancers provide specialist skills only when a project needs them. The agency avoids paying salaries, holiday pay and pensions for staff it rarely needs. -
Effective recruitment
What is a job description?
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A job description sets out the title, main tasks and responsibilities of a job. A job description tells applicants what the role involves.
Edexcel GCSE Business Active Recall Guide
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