Every business is an attempt to reap more than what has been invested, and profit is the excess of revenue over cost. (b) It can be a source of finance for meeting expansion requirements of business. Industries may be divided into three broad categories namely primary, secondary and tertiary. Explain any two business activities which are auxiliaries to trade. Warehousing creates time utility by way of storage facilities. An important factor to be considered at the start of the business is the place where the enterprise will be located. Which of the following does not characterize a business activity? Transports, banking, insurance, warehousing, and advertising are regarded as auxiliaries to trade, i.e., activities playing a supportive role. Advertising provides information to the consumers. However, in a specific sense, business refers to an occupation in which people regularly engage in activities related to purchase, production and/or sale of goods and services with a view to earning profits. Every business invests money (capital) to run its activities with the objective of earning profit. CBSE Previous Year Question Paper for Class 10, CBSE Previous Year Question Paper for Class 12. Disclaimer | Which of the following cannot be classified as an auxiliary to trade? If a student is unable to keep up with the pace of the … Thus, one essential characteristic of business is that there should be sale or exchange of goods or services between the seller and the buyer. No business enterprise can flourish in a competitive world without innovation. The decision relating to this factor will depend on the nature and size of business, availability of funds and the process of production. Buying and selling of goods is termed as trade. Risk is the uncertainty associated with an exposure to loss. No business can avoid risk, although the amount of risk may vary from business to business. Advertising helps in providing information about available goods and services and inducing customers to buy particular items. It embraces all those activities, which are necessary for maintaining a free flow of goods and services. What factors are important to be considered while starting a business? 5. Plans should also be made about how the employees will be trained and motivated to give their best performance. For the breeding of plants, the seeds and nursery companies are typical examples of genetic industries. Business activities cannot be undertaken unless funds are available for acquiring assets, purchasing raw materials and meeting other expenses. It is used as a measure of efficiency. No business can survive for long without earning profit. (ii) Risk is an essential part of every business: Every business has some risk. The hindrance of persons is removed by trade, thereby making goods available to the consumers from the possession or ownership producers. Various programmes for motivating managers need to be implemented. 6. Explain the concept of business risk and its causes. It helps in making the goods produced available to ultimate consumers or users. Activities which are meant for assisting trade are known as auxiliaries to trade. Which of the following does not characterize a business activity? These industries are involved in the construction of buildings, dams, bridges, roads as well as tunnels and canals. The enterprises might lose business and may be unable to earn profit. The best app for CBSE students now provides Nature and Purpose of Business class 11 Notes Business Studies latest chapter wise notes for quick preparation of CBSE exams and school based annual examinations. NCERT Solutions for Class 11th: Ch 1 Nature and Purpose of Business Business Studies Page No: 19 Exercises Multiple Choice Questions 1. It may be mentioned here that this activity can be undertaken either at small and individual level, or on large scale in a more formal and organized level. They may even be inclined to exploit various sections of society to earn immediate profit. Manager performance and development, therefore, is an important objective. • The chapter is divided into two sections. It builds up the reputation of a business enterprise. An entrepreneur undertakes risks under the expectation of higher profit. Every business is directed to the achievement of certain objectives. External or foreign trade consists of the exchange of goods and services between persons or organizations operating in two or more countries. Business risk is the possibility of failing to earn sufficient profits or incurring losses as a result of various unforeseen circumstances which are beyond the control of a business. These are concerned with using the materials, which have already been extracted at the primary stage. This may further be divided into. → Tertiary Industries: These industries provide support services to primary and secondary industries as well as activities relating to trade. Pure risks involve only the possibility of loss or no loss. A business enterprise must aim at standing on stronger footing in terms of offering competitive products to its customers and serving them to their satisfaction. Advertising is one of the most important methods of promoting the sale of products, particularly, consumer’s goods like electronic goods, automobiles, soaps, detergents etc. Business may be defined as an economic activity involving the production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society. Tax planning has become necessary these days because there are a number of tax laws in the country and they influence almost every aspect of the functioning of modern business. Each form has its own merits and demerits. Therefore, every enterprise must aim at improving its workers performance. Candidates who are pursuing in Class 11 are advised to revise the notes from this post. Processing industry which involves successive stages for manufacturing finished products, as in the case of sugar and paper. Get step by step NCERT solutions for Class 11 Business-studies Chapter 1 -nature-and-purpose-of-business . It refers to sale, transfer or exchange of goods. 6. These days’ goods are produced on a large scale and it is difficult for producers to themselves reach individual buyers for sale of their products. The industries which provide support services to other industries are known as. The chances of fire, theft or strike are examples of pure risks. → Advertising: It is one of the most important methods of promoting the sale of products, particularly, consumers goods like electronic goods, automobiles, soaps, detergents etc. Uncertainty of return refers to the lack of knowledge relating to the amount of money that the business is going to earn in a given period. Along with the transport facility, there is also a need for communication facilities so that producers, traders and consumers may exchange information with one another. Objectives are needed in every area where performance and results affect the survival and prosperity of business. He will obviously like to enter that branch of industry and commerce, which has the possibility of greater amount of profits. Studyrankers is a free educational platform for cbse k-12 students. Professional code of conducts is to be followed. This may result in the non-cooperation or even opposition from the affected people against the malpractices of business enterprises. Trade is an essential part of commerce. It is practically impossible for producers and traders to contact each and every customer. These industries provide service facilities. Products of these industries are usually transformed into many other useful goods by manufacturing industries. Those engaged in professions are known as professionals. 2. Economic activities may be further divided into three categories, namely. Obsessed with profit, business managers may neglect all other responsibilities towards customers, employees, investors and society at large.


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