Friday, May 24, 2013

Business can be defined as the financial activities for the purpose of generating profit. Financial activities mean financial transaction between two or more persons. These transactions include transfer of goods or services.

According to Joseph T. Straub and Raymond F. Attner, "Business is an organization engaged in producing goods and services to make profit".

All financial activities are not business. To be a business, there must be a purpose of gaining profit.The key points of these definition of business are  -

      • A financial activity;
      • An organization;
      • A purpose of making profit.

Example:
a) A man had a garden of mango. He had a lot of mango trees. At the season, he collected a huge amount of mangoes from his garden. Then he gave all mangoes to every house within his village.

b) The man collected again a lot of mangoes from his garden on the next year. Then he went to market and sold them to the people. Thus he made profit by selling the mangoes.

From the two example we can say that example (a) is not business, because here there is no way of making profit. But in example (b) is a business, because here there is a way of making profit.

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