Notes : Nature & Purpose of Business Class 11 Notes | EduRev

Class 11 : Notes : Nature & Purpose of Business Class 11 Notes | EduRev

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Nature and Purpose of Business (Made By- Rahat)
Business: An economic activity involving the production and sale of goods and 
services undertaken with a motive of earning profit by satisfying human needs in society 
is called business.
Characteristics of Business
An economic activity: All business activities are economic activities and are done for 
the sole purpose of earning money.
Production and procurement of goods and services: A business activity involves 
production or procurement of goods and services. A manufacturer is involved in 
production, while a shopkeeper is involved in procurement.
Sale and exchange of goods and services for the satisfaction of human 
needs: Sale and exchange of goods and services is done to satisfy human needs.
Dealing in goods and services on a regular basis: One time dealing in goods or 
services cannot be termed as a business. The business should happen on a regular 
basis.
Profit earning: Profit earning is the sole motive of doing a business.
Uncertainty of returns: Returns can never be certain in business activity. This 
happens because of external factors which are outside the control of the business 
organization.
Element of risk: An element of risk is always present in business activity.
  
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