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CBSE Class 11 Commerce Entrepreneurship Business Arithmetic Complete Details

CBSE Class 11 Commerce Entrepreneurship Business Arithmetic : The goal of the Academic, Training, Innovation and Research unit of Central Board of Secondary Education is to achieve academic excellence by conceptualizing policies and their operational planning to ensure balanced academic activities in the schools affiliated to the Board. The Unit strives to provide Scheme of Studies, curriculum, academic guidelines, textual material, support material, enrichment activities and capacity building programmed. The unit functions according to the broader objectives set in the National Curriculum Framework-2005 and in consonance with various policies and acts passed by the Government of India from time to time.

CBSE Class 11 Commerce Entrepreneurship Business Arithmetic Complete Details

CBSE Class 11 Commerce Entrepreneurship Business Arithmetic : You can find the notes for the sixth chapter of CBSE class 11 entrepreneurship in this page. In this chapter, the students learn about the significance and strategies used to build a cash register with special emphasis on understanding the concepts of Cash Inflow and Cash Outflow. The students are introduced to the concept of cost and its associated components like Startup, fixed and variable costs. The concepts of unit cost, unit of sale and unit price are explained. The students learn about how to compute the per unit cost for a single product. The also learn the concepts of profit, how it is computed and how the direct and indirect expenses affect the profit. The students will learn the importance of Income statement and the basics of how it is created. They learn the significance of cash flow projects in running the finances in a business at a smooth pace. An introduction is given to the concept of Break Even Analysis. This chapter concludes giving the students an introduction to the taxes and their significance.

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CBSE Class 11 Commerce Entrepreneurship Business Arithmetic Complete Details

CBSE Class 11 Commerce Entrepreneurship Business Arithmetic : This page contains the CBSE entrepreneurship class 11 chapter Entrepreneurship as Business Finance and Arithmetic notes. You can find the questions/answers/solutions for the chapter 6 of CBSE class 11 entrepreneurship in this page.

We know that blood is very important in living beings. What is equivalent of blood for an enterprise to survive?

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Monetary resources or cash.

Where does the businesses usually record all the monetary transactions on a daily basis?

The businesses usually record all the monetary transactions in cash register or cash book. As these transactions are initially recorded in the cash register or cash book, it is also called as book of original entry.

What does the unit cost refer to? Fixed cost or variable cost?

Unit cost refers to the variable cost.

How do you calculate the Gross Profit or Gross Margin?

Gross Profit or Gross Margin is calculated using the following formula:
Gross Profit or Gross Margin = Unit Price – Unit Cost.

Name the business where the unit of sale is square feet or yard?

Construction business, Real estate, apartment

Which business uses meter as the unit of sale?

Textile, electrical (wires)

Which business uses litre as the unit of sale?

Beverages (water/juices), Fuel supply (petrol/diesel), Grocery (oil), dairy (milk)

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Which business uses kg as the unit of sale?

Metal trading, Fruit vendor(Grapes), Grocery (Salt), Construction (cement)

Which business uses time as the unit of sale?

Freelancing (hourly jobs), Plumber, Lawyer

Which business uses Piece/Dozen as the unit of sale?

Clothes, Watches, Books, Fruit Vendor (bananas/apples)

What is the unit of time used by a consultant?

Time: hour

State and define the two types of costs.

The two types of costs associated with a business are

  1. Start-up or One-Time cost: Start-up or one time cost is the cost incurred during the initial phase of the business to meet all the start-up expenses.
  2. Operational costs: Operational costs are the costs incurred to run the daily operations of the enterprise.

What does the government do with the revenue generated by collecting the taxes?

The government spends the revenue generated by collecting taxes to implement social welfare programs. Few of the social welfare programs include

  1. the infrastructure development
  2. social service
  3. salaries for the government employees
  4. social benefits
  5. military expenditure
  6. providing better education etc.

Give few examples of direct tax?

  1. Corporation tax
  2. Income tax
  3. Property tax

Define ‘Unit of Sale’?

Unit of Sale can be defined as the measure of product/service sold. It is basically used for billing the buyer

Define ‘Gross Profit’?

Gross profit is the profit that a business can make by selling a product or service before deducting the fixed expenses. It is also know as Gross Margin. It is calculated as follows:
Gross Profit per unit = Unit Price – Unit cost

What is the term used for ‘selling a product or service and collecting the payment at a later date’?

This is called selling on credit where in the buyer pays the seller at a later date.

State few of the start-up or one-time costs

  1. Appliances (like refrigerator/air conditioner/ water dispenser/TV etc for employees)
  2. Advance paid towards lease/rent
  3. Building
  4. Business Registration expenses
  5. License expenses
  6. Computers, Software & hardware
  7. Electricity and electrical wiring setup expenses
  8. Furniture and Interior decoration
  9. Infrastructure
  10. Initial payment for procuring electricity, telephone, internet etc
  11. Land
  12. Raw materials, Machinery, tools and equipment
  13. Recreation (providing a gym TV room, or table tennis or caroms facility for the employees)
  14. Utensils
  15. Vehicles for business purpose
  16. Salary to the employees in the start-up period
  1.  Consultant charges
  2. Housekeeping
  3. Internet and Telephone
  4. Marketing and promotional
  5. Property tax
  6. Rent for the building/equipment/vehicles
  7. Research and development
  8. Salary to the employees
  9. Stationery
  10. Utility
  11. Wages

State few ways in which the cash inflows into the business.

  1. Claims Received
  2. Franchise payments received
  3. Investor equity
  4. Legal settlements’ amount received
  5. Loans from banks/family/friends
  6. Owner’s equity
  7. Rent received
  8. Sale of Assets or Scrap
  9. Sales Receipts
  10. Sale of shares
  11. Subsidy from the government

State few ways in which the cash outflows from the business.

  1. Building maintenance and other expenses.
  2. Building
  3. Computers and related hardware
  4. Electricity, Telephone, Internet expenses
  5. Employee recreational expenses
  6. Employee salaries and other perks/benefits
  7. Employee training expenses
  8. External consultant charges
  9. Interior decoration
  10. Marketing and promotional expenses
  11. Money paid for legal settlements
  12. Raw material
  13. Software purchases and other related license renewal charges
  14. Stationery
  15. Tools, Equipment and machinery
  16. Utility expenses

Define inflow?

The cash that gets into the business or receipts of cash is called as inflow.
This will usually results from

  1. Operations performed by the organization.
  2. Various investments flowing into the business.
  3. As a result of financing.

Define outflow?

The cash that goes out of the business or payments of cash is called as outflow
This will usually results from

  1. Expenditure incurred by the organization.
  2. Various investments made by the organizations in the other businesses.
  3. The organization provides the required finance for other enterprises/businesses.

Tabulate the key distinguishing factors between direct and indirect tax.

Direct Taxes Indirect Taxes
Imposed directly on the tax payer by the government. Imposed on the products or services. This tax is collected by an intermediary person or entity (such as a restaurant or a medical store or supplier) and is born by the end user or entity.
Paid directly by the tax payer to the government The intermediary person or entity who collected the tax from the end user pays the tax to the government.
The direct tax can not be transferred to someone else Except the end user or entity, all the intermediary persons transfers the tax to the person or entity to whom the product or service is sold
Few examples of the direct tax are income tax, property tax, social security tax, corporation tax etc Examples include central excise duty, customs duty, entertainment tax, luxury tax, service tax, sales tax or Value added Tax (VAT) etc

What is the primary objective of the business?

When it comes to the economy stand point, earning significant profit is the primary motive of almost all the businesses. They always strive to earn profit and work with this as their primary objective. Everyone in the enterprise should work towards the goal of fulfilling this objective. Only through profits the company can sustain a business and does not fall into the bankruptcy.

For continuous sustenance in the business, it should start earning money to meet the expenses like salaries to the employees etc. The moment the business start seeing losses, it should spend the amount from investment to meet these expenses. This will be against the objective of the business.

In which cases the monetary transactions between businesses are referred to as loan or credit?
At times, business perform monetary transactions on mutual trust among them. In these cases these monetary transactions are referred to as loan or credit.

Define inflow?

The cash that gets into the business or receipts of cash is called as inflow.
This will usually results from

  1. Operations performed by the organization.
  2. Various investments flowing into the business.
  3. As a result of financing.

CBSE Class 11 Commerce Entrepreneurship Business Arithmetic Complete Details

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