The Nature Of Business Flashcards
What is Business?
An organization that uses resources to produce goods and services that meet a customer’s wants with the aim of making a profit
What does a business use to produce goods and services?
Resources (labour, raw materials, energy & premisise)
What is Business Activity?
The process that is used to convert raw materials through labour and equipment into finished goods
Business Activity Process
Use Resources •Cutting Produce
• materials • Assembly Goods &
• labour ➡️ • Production ➡️ Service
• energy • Drilling
• premises
What is Enterprise?
The vision and creativity shown by a person when they are prepared to take risks by setting up a new business
What is Entrepreneurship?
People with Enterprise who have changed and turned their ideas into products and services and set up a business
The Entrepreneur:
- takes an idea
- uses some of their own money through saving & borrowing
- accepted responsibility of managing a business
- accepted the possible risk of failure
Without Entrepreneurship:
- No business will be set up
- Less choices for consumers
- Less competition
Economic Activity
Many of the activities that we engage in are aimed to satisfy our needs
Economic Activity
Many of the activities that we engage in are aimed to satisfy our needs
Direct Production
Early people had a simple way of like as they would provide all of their need themselves without the help of others
(Instruments of Exchange) Legal Tender
Money which the state or government decides is acceptable as payment up to any amount. It is usually made up of coins and notes. In modern society it’s importance is declining and is being replaced by more modern means of exchange
(Instruments of Exchange) Bills of Exchange
A method of payment used in international trade. The drawer (the seller) draws up the bill of exchange and sends it to the drawee (the buyer) with payment date of the goods being sold. The buyer receives the bill and agrees to the amount and other details on the bill and accepts it. The bill is then returned to the seller who keeps it until the date of payment.
(Instruments of Exchange) Money Order
A paper document similar to a cheque used for making payments usually in a foreign country. Money orders are prepaid and so they are only issued by the bank after a buyer pays for the money order with cash or another form of guaranteed funds. It is used to make payments or to send money to friends or family abroad. When the person or company receives the money order it can be exchanged at the bank for the amount stated on it.
(Instruments of Exchange) Bank Draft
A cheque drawn by the bank itself. It is a type of cheque where the bank guarantees to the payee that their funds are secured. When someone makes a payment and the payee wants to be guaranteed that the funds are available in the drawer’s bank account a bank draft is given to the payee. It is an official cheque issued by the bank itself that confirms that there are sufficient funds in the drawer’s bank account.
(Instruments of Exchange) Electronic Banking
Advances in technology are having a major impact on the range, speed and efficiency of the methods of payment use in the Caribbean. Payments can now be made electronically i.e. “via the use of a computer network” without the need for paper base methods in a number of ways. It is a very fast and safe way of making payments during trade
(Instruments of Exchange) Electronic funds transfer
Banks can communicate by computers to transfer money from one bank account to another. A cardholder can insert his or her automatic banking card (LINX card, ATM card, Debit card) into a machine that is electronically linked to his or her bank account. By entering a special code (PIN number) the cardholder authorises the immediate transfer of money from his or her account
