Business Activities — Flashcards

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Business is an economic activity involving sale, transfer, or exchange of goods and services for the purpose of earning money. It is concerned with producing or acquiring goods and services and placin…

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Business is carried on to earn profit through buying, selling, production, and distribution. A profession requires formal education and training and involves personal and expert services for a fee. Em…

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Cooking food for personal use is not business because there is no sale or exchange for price. A restaurant is business because food is cooked and sold to customers for money.

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Business needs regular dealings. One sale by itself is only a single transaction. Recurring purchase and sale is the real mark of business.

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Profit motive means the main aim of business is to earn profit. Profit helps business survive, grow, and expand. Business must earn profit by serving society.

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The main characteristics are sale, transfer or exchange; dealings in goods and services; regular dealings; profit motive; creation of utilities; economic activity; and risk.

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Risk means uncertainty of profit or possibility of loss. Business risks may arise from fire, theft, demand changes, fashion changes, natural calamities, and bad debts. Some risks can be insured, while…

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Fire and theft are examples of risks that can be insured. Risks like change in demand and change in fashion cannot be insured. Insurance protects against certain losses, but not all business risks.