chapter -1 : nature and purpose of business
TRANSCRIPT
Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI [ 1
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CHAP
TER
-1 : n
atur
e an
d pu
rpose
of
busines
s
Nat
ure
and
Pur
pose
of
Bus
ines
s
Thes
e ac
tiviti
es a
re p
erfo
rmed
fo
r m
enta
l and
em
otio
nal
satis
fact
ion.
Thes
e ac
tiviti
es a
re p
erfo
rmed
fo
r ea
rnin
g m
oney
.
It r
efer
s to
pur
chas
es a
nd s
ale
of g
oods
for
earn
ing
prof
it.
It r
efer
s to
wor
k w
hich
is d
one
for
othe
rs a
nd in
ret
urn
gets
re
mun
erat
ion.
Incl
udes
thos
e ac
tivite
s w
hich
re
quir
e sp
ecia
l sk
ills.
It r
efer
s to
buy
ing
and
selli
ng o
f goo
ds a
nd
serv
ices
for
earn
ing
prof
it
It in
clud
es a
ll th
ose
activ
ities
whi
ch h
elps
in
over
com
ing
hind
ranc
es
of p
rodu
ctio
n an
d di
stri
butio
n.
Cap
ital
Inve
stm
ent l
ess
than
₹ 2
5 la
khs
Cap
ital I
nves
tmen
t be
twee
n ₹
25
lakh
s to
₹ 5
Cro
re
Cap
ital
Inve
stm
ent
betw
een
₹ 5
Cro
res
to ₹
10
Cro
res
Cap
ital
Inve
stm
ent
mor
e th
an
₹ 10
Cro
re
Extr
actio
n, P
rodu
ctio
n,
Con
vers
ion,
pro
cess
ing
or fa
bric
atio
n co
mes
un
der
Indu
stry
It in
clud
es a
ctiv
ities
don
e fo
r ob
tain
ing
raw
mat
eria
ls
like
min
ing
It in
clud
es
thos
e ac
tiviti
es
mea
nt fo
r m
anuf
actu
ring
of
fini
shed
goo
ds
Mind
map
: 1. n
atur
e an
d pu
rpose
of
busines
s
• It
incr
ease
s ca
paci
ty o
f
ear
ning
pro
fit
• Em
ploy
men
t
oppo
rtun
ities
•
Soci
al Ju
stic
e•
Self
su
ccifi
cien
t•
It fo
cues
on
the
sa
tisfa
ctio
n of
wan
ts a
nd d
esir
es
of
the
soci
ety
• So
cial
and
Psyc
holo
gica
l
deve
lopm
ent o
f
empl
oyee
s•
Dev
elop
men
t of
hu
man
Res
ourc
es
• It
off
ers
empl
oym
ent
op
port
uniti
es•
It fa
cilit
ates
exc
hang
e of
goo
ds
an
d se
rvic
es•
It e
nsur
es im
prov
ed s
tand
ard
of
del
iver
y
• It
dea
ls w
ith a
ctiv
ities
dir
ecte
d
tow
ards
pro
fit e
arni
ng•
It c
reat
es ti
me
and
utili
ty in
goo
ds•
Tran
sact
ion
shou
ld b
e re
gula
r
2 ] Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI
To know about more useful books for class-11 click here
CHAP
TER
-2.1 : f
orm
s o
f bu
sines
s o
rgan
isat
ion
For
ms
of B
ussi
ness
O
rgan
isat
ion
It m
eans
bus
ines
s ow
ned
and
cont
rolle
d by
a s
ingl
e pe
rson
.
• It
is o
wne
d by
one
per
son.
•
He
is h
avin
g fu
ll po
wer
of d
ecis
ion
mak
ing.
• Th
e lia
bilit
y of
ow
ner
is u
nlim
ited.
• It
is e
asy
to s
tart
•
Secr
ecy
leve
l is
high
.
• R
aisi
ng o
f Fun
ds is
diff
icul
t.•
The
owne
r m
ay n
ot b
e ex
pert
s is
all
a
reas
of w
ork.
It is
a v
olun
tary
ass
ocia
tion
of tw
o or
m
ore
join
ed fo
r sh
arin
g pr
ofit.
• M
axim
um 2
and
max
imum
10
in
b
anki
ng b
usin
ess
and
20 in
non
-
ban
king
bus
ines
s.•
It is
an
outc
ome
of a
gree
men
t.•
Its
liabi
lity
is li
mite
d.
• It
is e
asy
to fo
rm.
• La
rge
amou
nt o
f cap
ital.
• R
isk
fact
ors
is s
hare
d by
all.
• R
estr
ictio
n on
the
num
ber
of
par
tner
s th
at c
an b
e
adm
itted
.•
Leve
l of s
ecre
cy is
less
.
• A
ctiv
e Pa
rtne
rs
• Sl
eepi
ng P
artn
ers
• Se
cret
Par
tner
s•
Nom
inal
Par
tner
s•
Part
ner
by E
stop
pel
• Pa
rtne
r by
hol
ding
out
• Pa
rtne
rshi
p at
Will
• Pa
rtic
ular
Par
tner
ship
• U
nlim
ted
Liab
ility
Par
tner
ship
• Li
mte
d Li
abili
ty P
artn
ersh
ip
• It
is a
wri
tten
agr
eem
ent.
• It
incl
udes
nam
es, l
ocat
ion,
dur
atio
n
of b
usin
ess,
pro
fit s
hari
ng r
atio
etc
• A
par
tner
of s
uch
fir
m c
anno
t file
suit.
• Th
e fir
m c
anno
t
file
sui
t aga
inst
thir
d pa
rty.
It c
onsi
sts
of v
ario
us o
rgan
izat
ion
owne
d an
d m
anag
ed b
y go
vern
men
t.
• C
apita
l is
cont
ribu
ted
by
go
vern
men
t.•
Publ
ic w
elfa
re is
the
mai
n
obje
ctiv
e.•
It is
acc
ount
able
to th
e pu
blic
.
• Th
ese
are
e
stab
lishe
d by
depa
rtm
ent o
f
min
istr
y.•
They
are
con
trol
led
b
y go
vern
men
t.•
It is
sub
ject
ed to
audi
t rul
es o
f the
gove
rnm
ent.
•It i
s a
com
pany
in
whi
ch n
ot le
ss
tha
n 51
% s
hare
c
apita
l hel
d by
g
over
nmen
t
• It
ref
ers
to in
volm
ent
of
pri
vate
sec
tor
in
go
vern
men
t pro
ject
s.•
It a
ims
at p
ublic
bene
fits.
MIN
D MAp
: 2.1 Fo
rms o
f bu
ssines
s o
rgan
isat
ion
• It
is e
stab
lishe
d
unde
r a
spec
ial
A
ct o
f Par
limen
t •
It h
as a
sep
arat
e
lega
l ent
ity•
Boar
d of
Dir
ecto
rs
a
ppoi
nted
by
g
over
nmen
ts.
Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI [ 3
To know about more useful books for class-11 click here
CHAP
TER
-2.2 :
form
s o
f bu
sines
s o
rgan
isat
ion
For
ms
of B
usin
ess
Org
ansi
atio
n
It is
a v
olun
tary
ass
ocia
tion
of
pers
ons
havi
ng s
eper
ate
lega
l en
tity
• It
is c
reat
ed b
y la
w.
• It
has
per
petu
al e
xist
ence
.•
It h
as a
com
mon
sea
l.
• Th
e lia
bilit
y of
shar
ehol
der
is li
mite
d.•
Easy
tran
sfer
of s
hare
.•
Skill
of e
xper
ts a
re
av
aila
ble.
• Th
e fo
rmat
ion
proc
ess
is
tim
e co
nsum
ing.
• Le
vel o
f Sec
recy
is le
ss.
• Id
entif
icat
ion
of b
usin
ess
op
port
unity
• Fe
asib
ility
stu
dies
• N
ame
appr
oval
• Fi
up
sign
ator
ies
to
th
e M
OA
• A
ppoi
ntm
ent o
f
prof
essi
onal
s•
Prep
arat
ion
of n
eces
sary
docu
men
ts
• Fi
ling
of
do
cum
ents
• Pa
ymen
t of
fe
es•
Cer
tific
ate
of
In
corp
orat
ion
• Pu
blic
Com
pany
• Pr
ivat
e
Com
pany
• O
ne P
erso
n
Com
pany
It is
an
auto
nom
ous
asso
ciat
ion
of
pers
on u
nite
d vo
lunt
arity
to m
eet i
ts
com
mon
nee
ds.
• Ea
sy to
form
• O
ne m
an o
ne n
ote
s
yste
m•
Lim
ited
Liab
ility
• Fu
nds
avai
labl
e is
limite
d•
Hig
h de
pend
ent o
n
gove
rnm
ent f
unds
• C
onsu
mer
Coo
pera
tive
Soci
ety
• Pr
oduc
er C
oope
rativ
e So
ciet
y•
Mar
ketin
g C
oope
rativ
e So
ciet
y•
Hou
sing
Coo
pera
tive
Soci
ety
It is
a c
ompa
ny
whi
ch h
as b
usin
ess
oper
atio
ns in
sev
eral
co
untr
ies
• Po
litic
al r
isk
alw
ays
exis
t.•
Dep
letio
n of
Nat
ural
Res
ourc
es.
• La
rge
amou
nt o
f cap
ital
• La
rge
scal
e of
mar
ketin
g •
No
com
pany
reg
iste
red
with
out i
t. •
Six
cla
uses
- N
ame
clau
se
-
Situ
atio
n cl
ause
- O
bjec
t cla
use
- Li
abili
ty c
laus
e
-
Cap
ital c
laus
e
• It
con
tain
s th
e ru
les,
dut
ies
righ
t
and
pow
er o
f the
off
icer
s an
d
dire
ctor
s of
the
com
pany
.
• It
is a
doc
umen
t whi
ch in
vite
s
the
publ
ic to
pur
chas
e its
sha
res
a
nd d
eben
ture
s.
• D
ecla
ratio
n fo
r th
e m
inim
um
s
ubsc
ript
ion
of s
hare
s•
A S
tatu
tory
dec
lara
tion
by a
dire
ctor
that
are
the
nece
ssar
y
docu
men
ts h
ave
been
com
plet
ed•
Com
men
cem
ent o
f bus
ines
s
4 ] Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI
To know about more useful books for class-11 click here
CHAP
TER
-3 :
social
res
pons
ibility
of
busines
s a
nd b
usines
s e
thics
Soci
al R
espo
nsib
ility
of
Bus
ines
s an
d B
usin
ess
Ethi
cs
Soci
al r
espo
nsib
ility
of b
usin
ess
refe
rs to
the
resp
onsi
bilit
ies
whi
ch it
ow
es to
diff
eren
t se
ctio
ns b
eing
a p
art o
f soc
iety
.
• It
is a
par
t of s
ocie
ty s
o ne
cess
ary
to
di
scha
rge
its o
blig
atio
n.•
It a
lso
build
s im
age
of th
e so
ciet
y.•
The
hum
an r
esou
rces
are
the
part
of
so
ciet
y so
thei
r pr
oper
upl
ifmen
t by
bu
sine
ss is
req
uire
d.
Busi
ness
can
dis
char
ge it
s re
spon
sibi
lity
only
by
follo
win
g he
alth
y et
hics
kno
wn
as B
usin
ess
Ethi
cs.
It m
eans
dec
idin
g w
hat
is r
ight
or
wro
ng e
thic
ally
.
• It
ow
es a
res
pons
ibili
ty fo
r th
e
bett
erm
ent o
f its
em
ploy
emen
t.•
A b
usin
ess
with
goo
d et
hics
is
re
spec
tabl
e fir
m in
the
soci
ety.
•
It h
elps
in e
arni
ng lo
ng r
un p
rofit
.
• Ec
o - f
rein
dly.
• R
ecyc
ling
of w
aste
.•
Upd
atio
n of
Pla
nt
a
nd M
achi
nery
. • St
reng
then
fina
ncia
l
posi
tion.
• Fa
ir r
etur
n on
inve
stm
ent.
• Fa
ir r
emur
erat
ion.
• G
ood
wor
king
cond
ition
.
• Pr
oper
Em
ploy
men
t
Opp
ortu
nity
.•
Avo
idin
g po
llutio
n.
• U
plift
men
t of
so
ciet
y es
peci
ally
wea
ker
sect
ion.
• Pr
oper
pay
men
t
of ta
x.•
No
conc
ealin
g
of In
form
atio
n.
MIN
D MAp
: 3. s
ocial
res
pons
ibility
of
busines
s a
nd B
usines
s E
thics
Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI [ 5
To know about more useful books for class-11 click here
CHAP
TER
-4 :
emer
ging m
ode
s o
f bu
sines
s
It m
eans
con
duct
ing
indu
stry
trad
e an
d bu
sine
ss u
sing
com
pute
r ne
twor
k 24
x 7
da
ys a
yea
r.
• B2
B (B
usin
ess
to B
usin
ess)
• C
2C (C
usto
mer
to C
usto
mer
)•
Intr
a B
• B2
C (B
usin
ess
to C
usto
mer
)
It is
eas
y to
sta
rt.
No
huge
cap
ital r
equi
red.
Le
ss u
se o
f pap
er.
• A
wel
l des
igne
d w
ebsi
te.
• Ef
ficie
nt a
nd e
ffec
tive
(T
elec
omm
unic
atio
n sy
stem
.)•
Qua
lifie
d an
d re
spon
sibl
e w
orkf
orce
.
• Se
ttin
g up
of r
eque
st s
peci
al c
rim
e ce
lls
b
y go
vern
men
t.•
Use
of d
igita
l sig
natu
re.
• A
utho
riza
tion
by c
redi
t car
d to
pro
vide
a s
ense
of s
ecur
ity.
Smal
l siz
e ca
rd u
sed
for
paym
ent
and
stor
ing
info
rmat
ion
• U
sed
in m
obile
com
mun
icat
ion.
• U
sed
for
pay
phon
es.
• U
sed
in e
lect
roni
c ba
nkin
g.
• D
ebit
Car
d.•
Cre
dit C
ard.
• D
igita
l Wal
let.
• M
obile
Pay
mem
t.•
Elec
tron
ic F
und
Tran
sfer
.
It m
eans
con
trac
ting
out n
on-c
ore
and
rout
ine
activ
ities
to o
utsi
de a
genc
ies.
It p
rovi
des
serv
ices
re
late
d to
mar
ketin
g,
hum
an r
esou
rce,
tr
ansc
ript
ion
etc.
,
It is
sub
set o
f BPO
Prod
uct a
t che
aper
cos
t.M
ore
focu
s on
str
engt
hs.
MIN
D MAP
: 4. E
MER
GING
MODE
S OF
BUSI
NESS
• • •
• •
Emer
ging
Mod
es
of B
usin
ess
6 ] Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI
To know about more useful books for class-11 click here
CHAP
TER
-5 :
sto
ck e
xcha
nge
Stoc
k Ex
chan
ge
It is
a m
arke
t pla
ce w
here
sto
ck, s
hare
s an
d se
curi
ties
are
boug
ht a
nd s
old.
• It
cre
ats
a co
ntin
uous
mar
ket w
here
sec
uriti
es a
re s
old
in la
rge
volu
me.
• It
per
form
es th
e ev
alua
tion
of s
ecur
ities
fu
nctio
n.•
It is
an
indi
cato
r of
futu
re e
cono
mic
situ
atio
n.
It h
elps
in r
egul
atin
g ca
pita
l mar
ket.
It b
uild
s co
nfid
ence
of t
he in
vert
ors
in s
hare
m
arke
t.It
cre
ates
a c
ontin
uous
mar
ket w
here
se
curi
ties
are
sold
in la
rge
volu
me.
It p
erfo
rms
the
eval
uatio
n of
sec
uriti
es fu
nctio
ns.
It is
an
indi
cato
r of
futu
re e
cono
mic
situ
atio
n.
• Im
port
ant s
ourc
e fo
r ra
isin
g m
oney
for
com
pani
es.
• It
pro
vide
s liq
uidi
ty to
inve
stor
s.•
It a
lso
prov
ides
the
serv
ies
of c
lear
ing
hous
e.
• It
pro
hibi
ts in
side
r tr
adin
g.•
It p
rom
otes
trai
ning
of t
he in
term
edio
ries
of th
e se
curi
ty m
arke
t.•
It m
ade
unde
rwri
ting
optio
n w
hich
red
uces
cost
.•
It r
egis
ter
and
regu
late
s th
e w
orki
ng o
f
mut
ual f
unds
etc
.•
It c
ondu
cts
enqu
irie
s an
d au
dit o
f sto
ck
ex
chan
ges.
Bom
bay
Stoc
k Ex
chan
ge
Loca
tion
: Mah
aras
htra
Mum
bai
Nat
iona
l Sto
ck E
xcha
nge
Loca
tion
: Mum
bai (
Mah
aras
htra
)
Del
hi S
tock
Exc
hang
e Lo
catio
n : D
elhi
Ahm
edab
ad S
tock
Exc
hang
e Lo
catio
n : A
hmed
abad
He
buys
or
sells
sec
uriti
es o
n be
half
of
inve
stor
s
It is
a fi
nanc
ial m
arke
t of s
ecur
ities
w
hose
pri
ces
are
expe
cted
to r
ise
It is
just
opp
osite
to b
ull m
arke
t
He
is a
dea
ler
who
dea
ls w
ith b
uyin
g a
nd s
ellin
g of
sec
uriti
es w
ith b
roke
rs.
It is
a ti
me
peri
odbe
twee
n te
xt is
not
vi
sibl
e.
It m
eans
with
di
vide
nd w
hich
is
rela
ted
to fu
ture
.
Secu
ritie
s ar
e de
liver
ed a
fter
ex
pire
s da
te.
Secu
ritie
s so
ld a
re
deliv
ered
aft
er
tran
sact
ion
is
mad
e.
•••••
••••••••
• To
pro
tect
inve
stor
’s in
tere
st•
To r
egul
ate
stoc
k m
arke
t•
To g
ener
ate
unifo
rm la
ws
in s
tock
mar
ket
• To
pro
vide
sm
ooth
func
tioni
ng to
sto
ck m
arke
t
Stock
Exchange
Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI [ 7
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CHAP
TER
-6 :
trad
e
Tra
de
Buys
or
sells
goo
ds in
larg
e qu
antit
ies
for
the
purp
ose
of r
esal
e or
inte
rmed
iate
use
.
• H
elps
in m
arke
ting
of g
oods
.•
Prov
ide
cred
it fa
cilit
y.
They
are
sm
all
trad
ers
who
dea
ls
in d
aily
use
pr
oduc
t
It r
efer
s to
the
netw
ork
of r
etai
l sho
ps
owne
d an
d m
anag
ed
by th
e sa
me
orga
nisa
tion.
Larg
e R
etai
l out
let
sell
vari
ety
of
Con
sum
er F
ood.
Ow
ned
and
cont
rolle
d by
con
sum
er a
nd s
ells
go
ods
at lo
wer
pri
ce.
It is
a la
rge
reta
il th
at o
ffer
ed a
va
reity
.
Thes
e re
taile
rs s
ell
thei
r ou
tput
s th
roug
h m
ail.
Buyi
ng o
r se
lling
on
tele
phon
e
In th
is a
cha
nce
of
doin
g de
velo
ped
form
of b
usin
ess
give
n
Ret
aitin
g pr
oduc
ts
to c
usto
mer
s vi
a ve
ndin
g m
achi
ne
• Pr
ovid
es v
alua
ble
info
rmat
ion.
• A
rran
ges
finan
ce.
•Pro
vide
s go
ods
at c
heap
er
pr
ice.
•Sup
plie
s ad
equa
te q
uant
ity
of g
oods
.
• W
hole
sale
r se
lls la
rge
qu
antit
y of
goo
ds b
ut it
sel
ls
sm
all q
uant
ity o
f goo
ds•
Who
lesa
ler
is a
link
bet
wee
n
pro
duce
r an
d re
taile
r w
hile
ret
aile
r is
a li
nk b
etw
een
w
hole
sale
r an
d cu
stom
er
Ret
ail t
rade
mea
ns to
buy
goo
ds
from
who
lesa
ler
in la
rge
quan
tity
and
to s
ale
it to
cus
tom
er in
sm
all
quan
tity
• R
egul
ate
the
inte
rnal
mar
ket
o
f the
cou
ntry
• To
issu
e st
anda
rd m
easu
res
to
use
com
mer
ce•
To p
rovi
de s
moo
th
fu
nctio
ning
to m
arke
t to
p
rovi
de v
alua
ble
info
rmat
ion
• To
con
duct
Res
earc
h w
ork
in
o
rder
to R
emov
e va
riou
s
hin
dran
ces
from
mar
ket
• C
hain
bet
wee
n w
hole
sale
r an
d
cus
tom
er•
Selle
s go
ods
to c
usto
mer
in S
mal
l
quan
titie
s•
Prop
er d
emon
stra
tion
of g
oods
is
n
eede
d
Doc
umen
ts s
ent b
y se
llers
in r
epon
se to
enq
uiry
Wri
tten
by
pote
ntia
l buy
er to
sel
ler
to e
nqui
reab
out g
oods
or
serv
ices
for
sale
It is
use
d to
info
rm b
uyer
that
the
amou
nt
paya
ble
has
been
incr
ease
d
It is
use
d to
info
rm b
uyer
that
the
amou
nt
paya
ble
has
been
red
uced
It d
escr
ibes
the
good
s of
fere
d by
sel
ler
It is
sen
t by
selle
r to
buy
er to
dem
and
for
paym
ents
Deb
it N
ote
Invo
ice
Chain store
8 ] Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI
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CHAP
TER
-7 :
fore
ign
trad
e
For
eign
Tra
de
Man
ufac
turi
ng a
nd tr
adin
g be
yond
geo
grap
hica
l bo
unda
ries
of a
cou
ntry
is k
now
n as
For
eign
Tra
de
or In
tern
atio
nal T
rade
.
It c
reat
es jo
bs.
It a
lso
mak
e co
mpa
nies
mor
e ef
ficie
nt.
Selli
ng o
f goo
ds a
nd s
ervi
ces
outs
ide
the
natio
n is
term
ed a
s ex
port
.
To s
ell s
urpl
us p
rodu
ctio
n.To
dev
elop
fore
ign
allia
nces
To d
evel
op m
arke
t glo
bally
Rec
eive
s or
der
by b
uyer
.En
quir
y ab
out c
redi
twor
thin
ess
of b
uyer
.O
btai
ning
exp
ort l
icen
se.
Obt
aini
ng p
resh
ipm
ent f
inan
ce.
Paym
ent o
f exc
ise
duty
.Pa
ckag
ing
and
mar
king
of g
oods
.In
sura
nce
from
the
insu
ranc
e co
mpa
ny.
Aft
er lo
adin
g in
to s
hip,
obt
aini
ng m
ate'
s re
ceip
t an
d gi
ving
it to
shi
ppin
g co
mpa
ny.
Impo
rter
hav
e to
col
lect
invo
ice,
bill
of l
adin
g.
cert
ifica
te o
f ori
gin
etc
to g
et th
e go
ods
from
the
cust
om.
Inde
ntLe
tter
of c
redi
t Sh
ippi
ng o
rder
Sh
ippi
ng b
illM
ate'
s R
ecei
pt
Bill
of L
adin
gBi
ll of
exc
hang
eC
onsu
lar
Invo
ice
Cer
tific
ate
of O
rigi
n
Wor
ld T
rade
Org
anis
atio
n (W
TO) c
ares
into
exi
sten
ce
on 1
st Ja
nuar
y 19
95.
It is
con
cern
ed w
ith s
olvi
ng tr
ade
prob
lem
s be
twee
n th
e co
untr
ies.
Its
head
qua
rter
is in
Gen
eva,
Sw
itzer
land
.
To r
emov
e ba
rrie
rs o
f Int
erna
tiona
l Tra
de.
To a
ct a
s D
ispu
te S
ettle
men
t Bod
y.To
lay
dow
n co
mm
on c
ode
of c
ondu
ct fo
r in
tern
atio
nal p
eace
.
Whe
n go
ods
are
purc
hase
d ou
tsid
e th
e bo
unda
ries
of
nat
ion
it is
cal
led
impo
rt tr
ade
To m
ake
adju
stm
ent i
n ob
ject
ive
the
adve
rse
bala
nce
of p
aym
ents
.To
con
serv
e sc
arce
fore
ign
exch
ange
res
ourc
es o
f th
e co
untr
y.St
abili
zatio
n of
pri
ce le
vel.
Col
lect
info
rmat
ion
abou
t pro
cedu
re im
port
ing
coun
trie
sPl
acin
g an
impo
rt o
rder
.O
btai
ning
lett
er o
f cre
dit.
Arr
angi
ng fu
nds.
Dis
patc
h of
shi
ppin
g ad
vice
to th
e im
port
er.
Whe
n go
ods
reac
hed
impo
rter
's co
untr
y, g
oods
are
sen
d at
the
dock
to b
e re
ceiv
ed b
y im
port
er.
• Im
port
Lic
ense
• In
dent
• Le
tter
of C
redi
t•
Bill
of E
xcha
nge
• Bi
ll of
Sig
ht•
Bill
of E
ntry
• Po
rt T
rust
Due
s R
ecei
pts.
• A
dvic
e N
ote
• Bi
ll of
Lad
ing
•
•
Larg
e sc
ale
prod
uctio
n.
Inte
grat
ion
of In
tern
atio
nal e
cono
mic
s.••
• • • • • • • • • • • • • • • •
•
It le
ads
to jo
b ou
tsou
rcin
g.
Loss
of f
orm
ing
base
.Su
bsid
izat
ion
of a
gri-b
usin
ess.
• • •
• •
• • • • • • • • •
• • • • • • • • •
MIN
D MAP
- 7
FORE
IGN
TRAD
E
Oswaal ISC Chapterwise Mind Maps, COMMERCE, Class – XI [ 9
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CHAP
TER
-8 :
insur
ance
Insu
ranc
e
It is
a c
ontr
act w
here
one
par
ty ta
kes
the
resp
onsi
bilit
yof
eith
er in
exc
hang
e of
som
e fix
ed fe
e.
• It
pro
vide
s ce
rtai
nity
of p
aym
ent
agai
nst r
isk.
• It
pro
vide
s co
vera
ge a
gain
st m
isha
ppen
ing.
• T
he fu
nds
rece
ived
from
insu
rer
are
inve
sted
in
r
elia
ble
fund
s w
hich
res
ults
is g
ood
retu
rn.
• R
eins
uran
ce :
It is
a p
ract
ice
whe
re b
y in
sure
r
tra
nsfe
r po
rtio
n of
ris
k on
oth
er p
artie
s to
avo
id
l
arge
obl
igat
ion
whe
n ex
pose
d to
ris
k •
Dou
ble
Insu
ranc
e :
It is
a p
ract
ice
whe
re b
y in
sure
r
get
s in
sure
d w
ith m
ore
than
onc
e w
ith d
iffer
ent
i
nsur
er.
It r
efer
s th
at n
o in
form
atio
n is
to c
ance
lled
by b
oth
the
part
ies.
It r
efer
s th
at th
ere
mus
t be
som
e re
latio
nshi
p be
twee
n in
sure
d an
d su
bjec
t mat
ter
of in
sura
nce.
Whe
n th
e lo
ss is
due
to m
ore
than
one
cau
se th
en
dom
inan
t cau
se is
to b
e co
nsid
ered
.
If in
sure
d co
mpe
rsat
e in
insu
red
than
all
righ
ts
tran
sfer
d to
the
insu
rer.
It r
efer
s th
at lo
ss w
ill b
e sh
ared
by
all i
nsur
er c
ase
of
mor
e th
an o
ne.
It r
efer
s th
at in
sure
d sh
ould
try
to m
inim
ize
the
loss
of
the
insu
rer.
It r
efer
s th
at in
sure
r w
ill o
nly
get c
ompe
nsat
e no
t any
sh
are
is p
rofit
.
• It
con
firm
s to
the
norm
s an
d co
nditi
ons
o
f the
insu
ranc
e po
licy
risk
. •
It ta
kes
plac
e at
a k
now
n tim
e.
It is
a s
ituat
ion
in w
hich
the
insu
ranc
e w
ould
be
agai
nst l
aw.
E.g.
: N
atur
al C
alam
ity
It p
rote
cts
agai
nst t
he in
cert
aini
ty o
f life
.
It p
rovi
des
prot
ectio
n of
goo
ds a
gain
st lo
ss
by fi
re.
It is
a p
rote
ctio
n ag
ains
t los
s by
mar
ine
peri
ts
or p
erits
of s
ea
It c
over
s w
hole
or
part
of m
edic
al e
xpen
ses
whe
ther
its
pre
or p
ost h
ospi
taliz
atio
n
It c
over
s ex
pens
es o
f veh
icle
dam
age
and
inju
ries
to d
rive
r
It is
a p
rote
ctio
n ag
ains
t old
age
, un
empl
oym
ent o
r an
y ot
her
econ
omic
haz
ords
It p
rote
cts
agai
nst t
he lo
ss d
ue to
dis
hone
st
acts
of e
mpl
oyee
s.