In the syllabus of 11th study material, 11th commerce is the first step towards learning accounting and financial principles for students who have opted commerce as their core subject. It is important to understand the subject matter very clearly as it lays the foundation for future education in the same stream. With PiRuby, the 11th commerce accounting basics and other subject matter contents are easily available with step by step example problems solved by subject matter experts. Students, who find classroom teaching insufficient and would like to explore the subject, even more, can definitely rely on PiRuby.
Before we start putting emphasis on class 11th commerce let us understand the concept of commerce. Commerce is the exchange or buying or selling commodities, especially the exchange of merchandise, on a large scale, between various places or communities, extended trade, and traffic. The social intercourse of commerce can be referred to the dealing of one person or class in society with another, familiarity. Though commerce is a vast field and needs much deeper understanding, here we will be talking about the most prominent commerce branches that are known to us and will be elaborated in class 11 commerce stream. These are
Trade is referred to the buying and selling of goods and service on any market. A particular instance of buying and selling or an instance of bartering items in exchange for one another to make a profit is also known as trade. The benefit of trade is that it eradicates hindrance of the person through various means such as wholesaler and retailer. To objectify trade, one can say possession and ownership of any commodity shall be passed on to the ultimate consumer from the producers.
Trade is divided into numerous segments such as Home, Wholesale and Retail depending on the type and size of the business. Trade is also segmented, based on demographics, which comes under foreign or import and export. Let us elaborate on the same.
Home Trade: Home trade is buying and selling within a country for example farmers.
Wholesale Trade: Wholesale trade is concerned with buying from producers and manufacturers, usually in bulk
Retail Trade: Retail trade is the selling of goods and service to the consumer who makes use of them for their own purpose, for example, local shops.
Foreign Trade: Foreign trade is buying and selling between the countries.
Export Trade: Export trade is the sale of goods and services from sellers in other countries to earn foreign currency and to dispose of surpluses.
Import Trade: Import trade is the buying of goods and services in other countries. Example importing a brand-new Mercedes Benz from Germany to India.
Aids to Trade
Aids to trade are commercial services which assist the functioning of the trade. There are six aids to trade which is mentioned earlier now we are going to elongate the discussion. It can also be termed as auxiliaries to trade, these activities are generally referred to nature of facilitating the activities relating to Industry trade. The play supporting role to trade, this not only support trade but also industries and hence the entire business activities.
Banking and Finance: banking and finance are concerned with the method by which payments are made.
Communications: Communications enables people to contact one another both at home and abroad and to transmit and receives commercial information
Advertising: Advertising is an important part of marketing goods and services.
Transport: Transport is the movement of goods, raw material, equipment and people from one place to another for examples ships, trains, airplanes trucks etc.
Warehousing: Warehousing provides storage of goods after processing or manufacturing after purchase.
Insurance: Insurance is the method by which people obtain protection by payment of premium against losses which results from risk. For example, LIC, ING insurance, Allianz etc.
These days goods are produced on the large scale and it is difficult for the producers to reach individual buyers to sell their products. Businessmen are engaged as middlemen to make the good available to the consumer in different markets.
The benefit of trade is that it eradicates hindrance of a person through various means such as wholesaler and retailer. To objectify trade, one can say possession and ownership of any commodity shall be passed on to the ultimate consumer from the producers. There are different challenged faced during trade, along with it aid to trade facilitates smooth flow of goods from producer to the consumer. In absence of trade, it will not be possible to undertake production on large scale basis.
When we talk about the trade we also must talk about the hindrances of commerce and how to overcome it. There are five known hindrances to commerce these are
Hindrance of People: Hindrance of people effects directly to the consumers as the producers need a mediator to deal with the consumers. The consumer and the producer do not come near as they do not know each other along with it they do not have a reason to trust each other, these difficulties are also known as the personal hindrance.
Hindrance of Time: Some goods are subjected to seasonal production but are used throughout the year, so it is uttermost necessary for the producer to make the product ready when the consumers desire to buy. To meet the unusual demand, it is essential to store the mass in a warehouse keeping ready stock for the utter necessity.
Hindrance of Place: Some good can only be produced in certain geographical condition whereas the demand of the good may have requirement worldwide. So, good is produced at one location and then exported to various places for use/consumption. Due to this geographical distance between the consumer and the producer arises the hindrance of place but which can be easily eradicated by transport.
Hindrance of Knowledge: Due to lack of knowledge one may not buy the best product available in the market. The knowledge possesses power and has the influence to create brand value, the knowledge of the market condition and the product is known as the hindrance to knowledge.
Hindrance of Finance: The effect of finance is directed and felt directly by the producer, consumer, and the trader. The financial institution such as bank makes the required fund available on the certain guarantee or maybe proper security and certain principle.
Now let’s talk about the different concept of business
Human activity: Every business transaction must have two parties involved, the buyer and the seller. Business is nothing but a contract and an agreement between the buyer and the seller hence human activity is involved in all business transaction. The course of the business depends on human connectivity, as the buyer and the producer both are of the same origin the nature of the business is based on meeting certain needs.
Economic element: Every business has an objective of running profit and no business can sustain itself without generating a certain revenue. Every person involved in the business want the business must produce profits as business is not a charity thus economic element is the basic element of the business. Business should not be overtaken by emotion or psychological reason.
Nature of work: Nature of work is perceived as the sale of goods, business is all about the selling of goods/commodities or service by the provider and the buying of the same by the consumer. The producer produces enough for the consumer to consume and furthermore if required and the need of storing goods required the producer store the goods produced in warehouses and storehouse to meet the need of the good on given day.
Capital investment: Every business needs an initial investment to start with, small or big every business needs to have a small amount of investment in the initial phase either from the bank or own resources. This investment can be utilized in setting up the office or expansion or simply just for growth.
Risk: It is the last component of the business, but the most crucial one. Every business has an element of risk, it is the uncertainty associated with the exposure to the loss. The risk in a business is related to the certain factors such as changes in consumer taste or preference or fashion, change in method of production or shutdown/strike, hazard such as natural calamities or human-made hazards also plays a key role in setting policies for risk management.
PiRuby put on special emphasis on teaching both practical implications along with the theoretical aspect of the commerce stream.