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Summary business management
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Summary of 8 pages for the course ACG2071 MANAGERIAL ACCOUNTING at Miami Dade College (business management)
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CHAPTER - 1NATURE AND PURPOSE OF BUSINESS
• Introduction:
All Human beings where ever they may be require different type of goods and services to
satisfy their needs. Business is a major economic activity in all modern societies concerned
with production and sale of goods and services required by the people. It is aimed at earning
money by satisfying human demands.
• Meaning:
Literal meaning of Business is “BUSY”.
Business is defined as an economic activity
involved in the production and sales of goods and services
undertaken with the motive of earning profit
by satisfying human needs in the society.
• Characteristics of Business activities:
An Economic activity: It means an activity aimed at earning money. Business is also aimed
at earning money or livelihood by satisfying human needs.
Production and procurement of goods and services: Every business enterprise must either
manufacture the goods or it acquires from producers. Goods may be consumer goods or
Capital goods. Services means facility offered to consumers like banking, insurance etc.
Sale or exchange of goods and services: Business involves transfer or exchange of goods
and service for value.
Dealing in goods and services on a regular basis: It should be a regular activity. One time
sale or exchange will not be considered as business.
Profit earning: Business always aims at earning profit.
Uncertainty of earning: There is always a possibility of less amount of profit or even loss in
business.
Element of Risk: There is always a possibility of Uncertainty of earnings.
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, • Comparison of Business, Profession and Employment:
Basis Business Profession Employment
1. How to Start? Based on Getting membership Getting an
entrepreneurs of a professional body appointment letter
/owners decision
2. What is its nature? Providing goods Rendering of Performing work as
and services to personalized expert per service contract
the public services
3. Qualification/Who can No minimum Requires qualification Requires
start? qualification and training in a qualification and
specific field training
4. Return/What will you Profit Professional Fees Salary
get?
5. Capital/How much you Requires capital Requires limited No capital required
need to start? as per the size of capital
the Business
6. Risk involved More risk Less risk No risk
7. Transfer of Interest – Can Is possible with Not possible Not possible
you transfer? some formalities
8. Code of conduct No code of Professional code of Code of conduct is
conduct is conduct to be prescribed by the
prescribed followed employer to be
followed
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