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Flip to reveal answersFill in the blank: Revenue = Price × ______.
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All 25 Flashcards — Revenue and revenue streams
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Question
Fill in the blank: Revenue = Price × ______.
Answer
Quantity sold.
💡 Hint
P × Q.
Question
Define revenue.
Answer
Revenue is the total income a business earns from selling its goods or services.
💡 Hint
Also called turnover or sales revenue.
Question
Define a revenue stream.
Answer
A revenue stream is a distinct source of income for a business.
💡 Hint
One specific way a business earns money.
Question
State the formula for total revenue.
Answer
Total revenue = price × quantity sold.
💡 Hint
TR = P × Q.
Question
Why is relying on one revenue stream risky?
Answer
If that income source falls (e.g. demand drops), the business may lose most of its income and struggle to survive.
💡 Hint
One stream fails = big problem.
Question
A business sells 200 coffees at $3.50 each. Calculate revenue.
Answer
Revenue = 200 × 3.50 = $700.
💡 Hint
Multiply quantity by price.
Question
What is one common mistake students make with revenue?
Answer
They confuse revenue with profit, even though revenue is before costs are deducted.
💡 Hint
Revenue is not profit.
Question
State another term used for revenue in Business Management.
Answer
Revenue can also be called turnover or sales revenue.
💡 Hint
Think: sales income.
Question
How do multiple revenue streams reduce risk?
Answer
If one stream declines, other streams can compensate, making overall income more stable.
💡 Hint
Diversification.
Question
Give one example of a subscription revenue stream.
Answer
Customers pay a recurring fee for continued access, such as Netflix or Spotify subscriptions.
💡 Hint
Recurring payment.
Question
A business sells 150 cakes at $4.00 each. Calculate revenue.
Answer
Revenue = 150 × 4.00 = $600.
💡 Hint
Multiply quantity by price.
Question
State the formula for revenue.
Answer
Revenue = price per unit × quantity sold.
💡 Hint
R = P × Q.
Question
Give one example of commission as a revenue stream.
Answer
A business earns a percentage of each transaction, such as an estate agent taking commission on house sales.
💡 Hint
Percent of a sale.
Question
How can subscriptions help a business’s cash flow?
Answer
Subscriptions provide predictable recurring income, which stabilises cash flow and improves planning.
💡 Hint
Predictable monthly income.
Question
Define profit in one sentence.
Answer
Profit is the amount remaining after all costs are deducted from revenue.
💡 Hint
Profit = revenue − costs.
Question
A shop sells 500 T-shirts at $20 each. Calculate revenue.
Answer
Revenue = 500 × 20 = $10,000.
💡 Hint
Use price × quantity.
Question
Give one example of licensing or royalties as a revenue stream.
Answer
A business earns income by allowing others to use its brand, product, or intellectual property in return for a fee.
💡 Hint
Paid permission to use IP.
Question
Why are multiple revenue streams useful for a business?
Answer
They reduce risk and can stabilise cash flow by providing more than one source of income.
💡 Hint
More than one income source.
Question
A café sells 200 coffees at $3.50 and 150 cakes at $4.00. Calculate total revenue.
Answer
Coffee revenue = $700 and cake revenue = $600, so total revenue = $1,300.
💡 Hint
Add revenue from each product.
Question
Why might multiple revenue streams attract investors?
Answer
Diverse income sources can make the business appear lower risk and more resilient, which investors prefer.
💡 Hint
Lower risk = more attractive.
Question
Why is revenue not the same as profit?
Answer
Revenue is the total money coming in before costs are deducted, while profit is what remains after costs are subtracted.
💡 Hint
Revenue before costs.
Question
Apple earns money from iPhones, Apple Music, App Store commission and licensing. What does this show?
Answer
It shows Apple has multiple revenue streams, earning income in different ways rather than relying on one source.
💡 Hint
Multiple income sources.
Question
Explain the “stool legs” analogy for revenue streams.
Answer
Revenue streams are like legs on a stool: the more legs (income sources), the more stable the business is if one leg weakens.
💡 Hint
More legs = more stable.
Question
In exam calculations, what should you do before writing the final revenue figure?
Answer
State the formula and show the calculation steps clearly before the final answer.
💡 Hint
Formula then working.
Question
Why should you show workings in revenue calculations in exams?
Answer
Because method marks can be awarded even if the final answer is incorrect, as long as the correct process is shown.
💡 Hint
Method marks.
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Topic 3.3 hub
Costs and revenues
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