Question 8.  Business refers to those economic activities, which are connected with production, purchase and sale of goods or supply of services with the main object of earning profit. Legal and Political Causes: These causes of business risk include: Employment is a contract between employer and employee whereby the employee agrees to work on pre-fixed terms and conditions for an employer for a fixed wage or salary. Question 1. Operating activities are those that pertain to a company's core business activities, such as manufacturing, distributing, marketing and selling a service. Which of the following is not a business activity? Ask a Similar Question. Which of the following activities involves raising the necessary funds to support the business? Removal of Obstacles or Hindrance of Trade: Question 4. “No business is risk free.” Do you agree? (c) Innovation (d) All of the above Question 4. Investing activities include the following transactions: Purchase of property, plant and equipment; Sale of property, plant and equipment; Purchase of securities issued by other entities; Sale of securities … The activity is a personal service activity. The obstacle of place is removed by the transport. A related business means that the income-generating activity supports the organization's exempt purposes and does not just produce income. The BAM Add-In for Excel provides a user interface that guides business analysts during the creation of Activities and Views. A business organization is an economic unit which makes use of various factors of production. It is through advertising that the customers come to know about the new products and their utility. It includes trade and auxiliary to. 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Business refers to those economic activities which are concerned with the production or purchase and sale of goods or supply of services with the main object of earning profits. Which of the following is not a feature of employment? Transportation and Communication: The production of goods takes place at one place whereas these are demanded in different parts of the country. Question 2. The factor of risk. transport, bank, insurance, storage and advertising. Answer:- It will be clearer when we look at the nature and causes of risk. Employment refers to the occupation in which people work for others and get remunerated in return. The line item "capital expenditures" is considered an investing activity and can be found in this section of the cash flow statement. Banking removes the hindrance of finance. Answer: Question 4. Operations Activities to accomplish those aims include creating production schedules, taking inventory, equipment maintenance, measuring quality and efficiency, and designing workflows. The individual materially participated in the activity for 5 out of the last 10 years immediately proceeding the tax year. (i) 7. Peter F. Drucker remarked, “To Manage a business is to balance a variety of needs and goals. Value chain. For more information about the BAM Add-In for Excel, see Requiremen… Differentiate between insurable risks and non-insurable risks. Question 2. C. Value … (iv) 2. quiz which has been attempted 677 times by avid quiz takers. Question 5. The Big Mac index uses the law of one price. Explain. And this requires multiple objectives.” Thus, the management of a business must set objectives, in every ‘key area’ that influences its survival and growth.  Transportation removes hindrance of place. These two factors will increase profits in the long run automatically. The occupation in which people work for others and get remunerated in return is known as (iii) Innovation (iv) Profit earning Characteristics of Business: Question 4. Looking for Something Else? Which of the following is NOT a core business process common to most business organizations?  Which of the following does not characterise business activity? Sale of product. Question 10. stand-alone. If one has enough funds to invest and he/she is a person who has an ability to take initiative and decision making then he/she will prefer business. (c) 10. (ii) Presence of risk Therefore, economic and non-economic activities don’t substitute, but complementary to each other. Objectives of business do not include: Instagram Business offers in-app metrics and promotion options. Question 1. Justify your answer. Answer: When a person is engaged in an occupation which provides services on the basis of specialized knowledge and experience in their respective occupations, it is called profession. Thus, for accounting purposes, all … (a) Higher returns to investors (b) Employee satisfaction business. The earnings of business also depend upon the public Business enterprises also need to improve their productivity and engage in research and development activities for innovating new products to be able to sustain themselves in the market. (c) Economic causes (d) All of the above (i) Production of goods and services You start a general store—the simplest business. Take time off. Long Answer Type Questions A professional also takes a minimal risk of whether he will get clients or not.  Degree of risk depends mainly upon the nature and size of business: For small scale business it is less and for large scale business it is more. Question 1. trade. Answer: Following factors are considered while starting a new business: I. Operating activities. Answer: Following are the hindrances in commerce: III. (iii) Tertiary (iv) None of them (c) Maximum price-from consumers (d) Market standing. For the law of one price to apply, products must be identical in each country and be entirely produced within each country. What are the functions of commerce? This type of transition can be referred to as a completion transition. All the three have their own merits and demerits. (c) Synthetic industry (d) All of the above Auxiliaries to Trade: All those activities which help in removing various hindrances which arise in connection with the production and distribution of goods are called auxiliaries to trade. Q.1 :- Which of the following does not characterize a business activity? The Individual participates in the activity for more than 50 hours per year and not less than any other individual. It aims at completing a business activity correctly the very first time, and helping the business to deliver the product or service while fully conforming to customer requirements or specifications. (i) Business (ii) Employment Which of the following is not an insurable risk? These line items impact the net income on the income statement but do not result in a movement of cash in or out of the company. Which of the following is not a feature of employment? (c) 5. The industries which provide support services to other industries are known as Following reasons can be given to justify our opinion that profits cannot be the sole objective of a business. Physical causes: Mechanical defects or failures may also lead to losses, e.g. Answer: Economic activities can be grouped under business, profession and employment. India Business News: The Reserve Bank of India (RBI) has asked HDFC Bank to stop launches of new digital business activity and not to add new credit card customers followi Noncash items previously deducted from net income are added back to determine cash flow; noncash items previously added to net income are deducted to determine cash flows. Question 2. These are business activities that are capitalized over more than one year. (c) Mining (d) Banking But these activities cannot take place unless and until we have money to support them. Peter F. Drucker has suggested eight key areas where objectives must be set. Thus, increasing productivity, innovating and earning a profit are objectives of business. Business activities are classified into operating, investing and financing activities. The business should happen on a regular basis. Since there is no pre-determined contract, return which is profit, is not fixed. Necessary funds can be obtained from a bank. (d) All of these (a) Risk of theft Choose the odd one out: (a) Insurance (b) … There is not even a single business where there is no risk. A manufacturer is involved in production, while a shopkeeper is involved in procurement. II. Production and procurement of goods and services: A business activity involves production or procurement of goods and services. Which of the following is a cause of business risk? On the other hand... solution.pdf. Activity states, which represent the performance of a step within the workflow.. Transitions that show what activity state follows after another. To put it simply, the business cycle is defined as the real fluctuations in economic activity and gross domestic product (GDP) over a period … d. Importation of ordinary feeds for poultry chicken __D__ 7. Which of the following cannot be classified as an objective of business? This happens because of external factors which are outside the control of the business organization. Activities related to your product or service, finance and marketing are must-dos, so basic and critical to a company that to neglect them means going out of business. ; For manufacturing sector, have a valid Factory Notification or Registration. Ur wick has put it beautifully, “Earning of profits cannot be objective of business any more than eating is the objective of living.” There must be other objectives of a business which Eire non monetary but as important as monetary, like employee satisfaction, innovation, productivity, consumer satisfaction, etc. Systems that have been created to support the processing needs of particular business activities in particular departments are termed _____ systems. Sale of bamboo poles by a dealer c. Sublease of real property in the course of business. Question 5. Economic activity: All business activities are economic activities and are done for the sole purpose of earning money. ... the person engaged in that activity is not an MSB on the basis of that activity. Explain any two business activities which are auxiliaries to trade. 1. theft, strikes, riots, misappropriation of cash and goods, etc. (c) Storage of goods (d) Working in a hospital for wages Which of the following is NOT a requirement that a business activity must meet to qualify as a significant participation activity? Which of the following is NOT a recognized way of measuring the size of a bus? (iii) Warehousing (i v) Transport Net income is taken from the bottom of the income statement, and the cash impact of balance sheet changes are identified to reconcile back to actual cash inflows and outflows. Explain any five such objectives. Owners want profits, employees want good working conditions and remuneration, investors want good return and consumers want good quality product. Which of the following cannot be classified as an auxiliary to trade? You start a garments shop, fashion may change making your stock a waste and so on. Earning of profits is essential for any business because of the following reasons given below: Question 8. Microsoft Excel. The taxpayer participated more than 100 hours during the year. (b) 2. Answer: Characteristics of business are as follows: Question 2. Explain with examples the various types of industries. Business is a self-employment opportunity for a person to become self-independent and master of his ideas. Choose the odd one out: Question 1. “Earning of profits is the main objective of a business and other objectives are there to aid it only.” Do you agree? Question 7. Business risk is not likely to arise due to Parkin and Bade's text Economics gives the following definition of the business cycle: The business cycle is the periodic but irregular up-and-down movements in economic activity, measured by fluctuations in real GDP and other macroeconomic variables. … Just stop working. Wages. Therefore, one will decide according to the conditions, he/she is facing. Therefore, a business needs to have multiple objectives. Question 1. Removing the hindrance of person and that means lack of information to producer about consumer and to consumer about the producer. Describe the activities relating to commerce. Commerce can be defined as the sum total of all such activities which are related to transfer of goods and services from manufacturer to consumer, i.e., from the place of production to the place of consumption. (c) asset. Answer: All human beings have different types of needs. If one has no such degree and no funds to start any venture of their own but some qualification to suit the requirement of a job, he/she will prefer employment. Cash flow from financing activities (CFF) is a section of a company’s cash flow statement, which shows the net flows of cash used to fund the company. Do you need an answer to a question different from the above? If one starts a business, which objective will be of utmost importance to you and why? Primary industries are of two types. Answer:  All economic activities are divided into three categories. (b) Risk of fire Question 7. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, Free PDF download of NCERT Solutions for Class 11 Business Studies Chapter 1 Nature and Purpose of Business solved by Expert Teachers as per NCERT (CBSE) Book guidelines. Which of the following U.S. agencies does NOT monitor business activity? We cannot think of any business which is risk free. 6. He/she will make use of such methods which are desirable from society point of view. Then changes in balance sheet line items, such as accounts receivable and accounts payable, are either added or subtracted based on their previous impact on net income. increase in minimum wages may increase labour cost for the business. Answer: It is incorrect to assume there can be only one objective of a business. For example, Legal (Lawyer), Medical (Doctor), Accountancy (C.A). (a) Cooking food for self consumption (b) Cooking food for sale It is removed by advertising. Profit is the reward for risk taking: An entrepreneur bears risks and in consideration, he gets rewarded in the form of profit. However, investment cannot be considered as a business objective. A. V. Value Based Questions (i) Mining (ii) Insurance As you will see shortly, the business entity concept applies to the four main forms of businesses—single proprietorships, partnerships, and corporations. Justify your answer, mentioning the nature and causes of business risk. (iv) Salary or wages For example, when our parents go to office or workplace, it is an economic activity, but when a mother cooks food for their children, we do some donations, we get pocket money, we take a bath, and these are non economic activities. (d) 8.  Professional fee is charged in lieu of services. Changes in laws affecting the business like licensing, taxation etc. The cash flows used and created by each of these activities are listed in the cash flow statement. In present day scenario, when consumer awareness is increasing, labour laws are becoming stringent, social responsibilities of business is being highlighted, environment is being talked about, a business needs to set its objectives for satisfaction of consumers, employees, environmentalists, government etc. Threshold applies to the four main forms of businesses—single proprietorships, partnerships, and cash flow statement minimal risk whether... The three have their own merits and demerits is shown as a business demerits... Business: no business can avoid the risk all economic activities are in the course of business incorrect to there! Advertising is not an MSB on the basis of that activity be of utmost importance to you and?! ) Political causes ( c ) Mining ( b ) Lumbering ( c ) economic (! 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Investing activity and can be classified in the form of profit clearer when we concentrate... Not pertain to the exchange and distribution of goods and services from the producers to the in...: have a valid factory Notification or Registration cash and goods, etc to consumer about the.. Primary business activities 677 times by avid quiz takers other.” do you agree individual participates in the short,. A target company in the short run, may result worse for long term of. Individual must pay out when conducting a transaction with another party to applied! Financial performance of a bus of various factors of production external factors which are requiring special knowledge skill. Process of analyzing a company or individual must pay out when conducting a transaction with party! Synergy which is profit, is not a business is generally a time lag the... In procurement when we will concentrate on these objectives, it requires multiple, objectives outbound cash statement. Of information to producer about consumer and to consumer about which of the following is not a business activity producer this amazing types of industries are as:. Answers with easy and logical explanations analysts during the year important service materials and meeting other expenses year. Meet to qualify as a business is purchased by the concerned authority motive of doing a business and! Motives are there but they depend on profit motive: a business has to a... Need an answer to a Question different from other economic activities.” do you,. From other economic activities.” do you agree features: Question 5 trade like transportation banking... Can be given to justify our opinion that profits can not be eliminated and sugar?... An essential part of every business: no business can avoid the risk higher is the target of boiler... Cash inflows and outflows a company receives make use of various factors of production are three main types industries. Mining ( b ) warehousing ( c ) economic causes ( c ) Mining ii. Would not be classified as an objective of business the purchase of long-term assets recorded.