Everything Flashcards
Definition of Business
Definition: A business is an economic activity that manufactures or provides different goods and services to fulfill human needs and wants.
Types: Profit-oriented businesses, Non-profit businesses.
Example: A bakery selling cakes (profit-oriented), a charity providing free meals (non-profit).
What are the main objectives of a business?
The main objectives include:
Earning profits
Increasing customer satisfaction
Improving the quality of goods and services
Generating employment opportunities
Ensuring employee welfare
What is a business environment?
The environment consists of internal and external factors that influence business activities.
What are the main types of business organizations?
Sole Proprietorship
Partnership
Incorporated Companies
Cooperative Societies
State Corporations
What are the advantages of a sole proprietorship?
Easy to start
Owner keeps all profits
Quick decision-making
Low legal requirements
What are the disadvantages of a sole proprietorship?
Unlimited liability
Limited capital
No continuity after owner’s death
Limited managerial expertise
What is a partnership?
A business owned by two or more people who share profits, risks, and responsibilities.
What are the characteristics of a partnership?
2 to 20 partners
Shared liability
Collective decision-making
No separate legal personality
What is an incorporated company?
A company registered under the Companies Act, with a legal identity separate from its owners.
What are the two types of incorporated companies?
Private Limited Company – Shares are privately held.
Public Limited Company – Shares can be traded on the stock market.
What are cooperative societies?
A: Organizations formed to promote the common interests of members (e.g., farmers’ cooperatives, SANASA banks).
What is accounting?
The process of recording, summarizing, analyzing, and reporting financial transactions to facilitate decision-making.
What are the objectives of accounting?
To determine profit or loss
To assess financial position
To ensure legal compliance
To facilitate business planning
