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

Chapter : 6

What Are Business Finance And Arithmetic ?

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    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)
    Outflow (All the payments made)

    Cash Register Format

    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


    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

    $$\text{Break Even volume (per month) =}\\\frac{\text{fixed cost (per month)}}{\text{Gross margin (per unit)}}$$


    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