Updated Notes on Business Studies
This article is for all those learners of Business Studies who want to learn some of the most important key notes on various topics of Business Studies and Research. Here you will find the meaning and definition of terms like Business, Trade, Commerce, Industry, Entrepreneur, Firm, Foreign Trade and etc.
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Key Notes on Terms used in Business Studies
A state of being busy in termed as business. Any human activity directed for production or acquisition of wealth through buying and selling of goods is known as business.
Exchange of goods for cash or credit is known as trade. Trade is primarily concerned with buying and selling of goods. Trade is regarded as the nuclear around whom the various activities of the commerce rotate.
Commerce denotes the sum total of business activities relating to distribution, marketing and the exchange of goods and services from the production centre. The organized system for the exchange of goods between the members of the industrial world is termed as commerce.
Those activities which are undertaken to produce, convert, extract and fabricate raw materials into finished product are known as industry. It is the place where raw materials are turned into finished product.
Entrepreneur is a person who takes initiative for establishing a business unit and he recognizes the need for a product or service.
The organization where various business activities are performed is called business enterprise. It is also regarded as a medium through which business activities are carried on.
Plant refers to an establishment where goods are produced or provisions of service originate. It is the production centre where machine, equipment and workers work together. The plant is otherwise called as mill or factory.
Firm denotes the broader sense of the term 'plant'. It refers to an establishment which owns an manages the plant, arranges marketing of the products, and maintains proper control.
Buying and selling of goods and commodities within the national boundaries of a country is known as home trade. Home trade may consist of wholesale trade and retail trade.
Purchase and sale of goods and commodities among different countries of the world is called foreign trade. Foreign trade may be an export trade or import trade.
The organisation or establishment which does something with regard to sale of goods is called marketing enterprise. These organisations make frequent dealing with other business houses.
Constructive industry refers to a type of industries which is engaged in the creation of infrastructure for smooth development of the economy. These industries are engaged in the construction of docks, building, roads, dams, tunnels and canals.
The facilities which facilitate buying and selling of goods and commodities are called aids-to-trade. The aids-to-trade are transporting, packing, warehousing, insurance and financing. These are essential for the growth of trade in a country.
The risks which a businessman faces during the ordinary course of a business are called business risks. The examples of business risks are goods lost by fire, theft or accident.
Profession denotes some kind of vocation carried on by specialized knowledge of an individual. The professional man renders personal services of specialized nature in return of fees.
A sole trader is a form of business which is owned and controlled by a single individual. Since ownership belongs to one individual, he is regarded as the financer, manager and the administrator of his business.
The word unlimited liability denotes that there is no limitation to the liability of the individual. The sole proprietorship as a form of business organisation enjoys the status of unlimited liability.
Promptness in taking decision is termed as quick decision. The sole trader can take prompt decision with regard to his business affairs as he ha supreme authority over his business. The sole trader arrives at a decision point quickly because no other consultants or associates are there who are to be contacted at the time of decision making.
The agreement to carry on partnership business is called partnership deed. It contains exhaustive provisions with regards to the matters concerning the business and the partners. So it is the document where terms and conditions for the conduct of business are incorporated. This document is otherwise called as the "article of partnership".
As the name implies, a sleeping partner is a person who sleeps and does not take active part in the day-to-day conduct of the business. Such a partner contributes capital for the business but does not take active part in the conduct of the business. He is otherwise called as dormant partner.
Limited partnership is a type of partnership where there is at least one general partner whose liability is unlimited and at least one special partner whose liability is limited. This type of partnership is found in UK, USA and other European countries. There is no provision of limited partnership under Indian Partnership Act, 1932.
A document which contains detail information about the joint stock company inviting public to subscribe for the share capital is called a prospectus. It is written invitation to the public to subscribe for share capital.
The process of conceiving an idea and developing it into concrete form through incorporation is called promotion. In other words, the process through which the idea of business opportunity is conceived, developed and assigned a shape in the form of company is called promotion.
A wholesaler is a person who buys large quantities of goods from the producers and resale them in small quantities to the retailers. He is regarded as the first intermediary in the channel of distribution.
A large scale retail establishment dealing in food products is called a super market. There is no sale assistants to sell the products. The customers collect their required articles through wheeled trollies and pay cash at the counter.
Vending machine is a type of selling machine where sale of the products is effected by inserting a coin to the machine. Railway tickets and bus tickets are sold by this machine.
Trade between two countries is called foreign trade. Foreign trade takes place when there are differences in the cost of production of commodities to be exchanged. Foreign trade is otherwise called as international trade.
The selling of goods by a home country to a foreign country is termed as export trade. The persons or institutions who carry on such types of trade are called exporters.
The buying of goods and services from a foreign country for the use of home country is termed as import trade. The persons or institutions who perform such types of trade are called importers.
Purchase of goods from a foreign country not for the sake of consumption but for re-selling those goods to another foreign country is termed as entrepot trade.
A printed form filled in all respect is submitted to dock authorities along with goods is called dock challan. This is prepared in duplicate. One copy is regained by dock authorities and the second copy is returned to the exporter which is known as dock receipt.
Bill of exchange along with shipping documents like bill of lading, invoice, insurance and certificate of origin is called a documentary bill.
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