# Business Finance And Arithmetic Class 11 Notes Entrepreneurship Chapter 6 - CBSE

## 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.

## 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