1. Background of Business Flashcards
business and accounting (27 cards)
What is the Barter System?
A system of exchanging goods to obtain other goods wanted
Why are businesses important in modern society?
They fulfill individual needs and wants through the production and distribution of goods and services
What is a business?
An economic activity that manufactures or provides different goods and services to fulfill human needs
What is the primary motive of most firms in the private sector?
Profit motive
What are two motives that drive businesses in the government sector?
Social welfare motive and profit motive
How has technology impacted business transactions today?
Transactions can now be performed rapidly and easily through electronic media
What is one objective of a consumer?
To obtain a quality product at a reasonable price
List three common objectives of profit-oriented businesses
- Earning profits
- Increasing customer satisfaction
- Generating employment opportunities
What are the basic human needs?
- Food
- Clothing
- Shelter
What are the characteristics of human needs?
- Being essential
- Being common
- Cannot be created
- Being limited
What distinguishes wants from needs?
Wants are different ways of satisfying needs and are not essential for existence
List two characteristics of wants
- Can be created
- Being complex
What are commodity manufacturing businesses?
Businesses that produce tangible goods required to fulfill human needs
What are service providing businesses?
Businesses that render activities or processes to fulfill customer needs
What are the four factors of production?
- Land
- Labour
- Capital
- Entrepreneurship
Define ‘Land’ in the context of factors of production
All natural resources available, including surface and underground resources
What does ‘Labour’ refer to in business?
The mental and physical contribution of individuals in a business
What is meant by ‘Capital’ in production?
Anything produced by man to facilitate the manufacturing process
What is the role of an entrepreneur?
To organize factors of production and take risks in starting and conducting a business
Who are stakeholders in a business?
Different parties interested in business activities to fulfill various objectives
List three examples of stakeholders in a business
- Owners
- Managers
- Customers
What is one objective of owners as stakeholders?
Security of investment
What is a common objective of employees as stakeholders?
Job security
What do suppliers provide to businesses?
Raw materials and transport facilities
