Business Finance And Arithmetic Class 11 Notes Entrepreneurship Chapter 6 - CBSE
Chapter : 6
What Are Business Finance And Arithmetic ?
Entrepreneurs need to understand the basic accounting concepts to understand the fundamentals of business.
Cash Register Or Cash Book
All the cash transactions are recorded in the book called a cash book or cash register. It is also known as book of original entry.
Flow Of Money (Cash Flow)
Inflow (All the receipt of money)
Cash Register Format
Outflow (All the payments made)
One column
Two column
Three column
Unit Of Sale
It is the measure of what products are sold. For example unit of sale for apple is kilogram.
Unit Price
Price at which one unit of sale is sold. Example the amount charged by tea vendor for a cup (100ml) of tea.
Unit Cost
Cost incurred by a company to produce, store and sell one unit of a particular product or service.
Gross Profit
Excess of unit price over unit cost is called as unit gross profit or unit gross margin.
Unit price – unit cost = Gross profit/unit
Cost
It is a derived value of money consumed to produce a current or future outcome.
Start-up cost
Cost which is incurred initially to start a business.
Operational cost
Cost incurred to carry out day to day operations of the business.
Break Even Analysis
It is a point at which the company neither makes profit nor suffers a loss.
At Break Even Point Total Revenue = Total Expenses
$$\text{Break Even volume (per month) =}\\\frac{\text{fixed cost (per month)}}{\text{Gross margin (per unit)}}$$
Taxes
Financial charge or other levy imposed upon a tax payer by government (State or Union).
Direct Tax
- Income tax
- Corporation tax
- Property tax
Indirect Tax
- Customs Duty
- Central Excise Duty
- VAT
- GST
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