UK Accounting Glossary
Business is recognized as a significant factor of production in an economy. It is referred to as a legalized entity that comprises of organizational supremacy. Business is also known as firm or an enterprise. A Business is set up in an economy with a view to providing goods and services to consumers.
Business is mainly found in capitalist economies, which are largely owned by private hands. The major goal of business is to make a profit and increase wealth. Generation of wealth in lieu of risk is the major characteristic of any business. Businesses are run either by a single entrepreneur or several individuals. There are several types of ownerships that are used to run any business. Businesses can be privately owned, not-for-profit or state-owned. An example of a corporate business is PepsiCo, while a mom-and-pop catering business is a private enterprise. Sole proprietorship, partnership, corporation and cooperative are the major forms of partnership of any business. Sole proprietorship represents ownership by any single individual. A partnership is the ownership shared between two or more people. A corporation is owned by multiple shareholders and is supervised by a board of directors.
The business cycle is referred to as the fluctuations taking place in the business activity of any economy. It is known that economic growth is not static; it’s rather an unsteady phenomenon. Economic growth has a tendency to follow a specific pattern of fluctuation. Sometimes it is observed that there is an above-average growth and it increases to reach the peak, then again sometimes it contracts below the average growth and finally reaches the lowest point. These there is a regular expansion and contraction in, which is known as the business cycle in economics.
Several theories were built to explain the concept of the business cycle. Real Business Cycle Theory or RBC theory is one such theory developed by using real economic situations. RBC is a class of microeconomic models that represents the accountability of business cycle by means of real shock. It is known that there are four major economic fluctuations like secular (trend), business cycle, seasonal, and random. RBC takes in to account the business cycle and considers that recession and boom periods of any economic growth are efficient in measuring exogenous amendments in the real economic environment.
Business is booming.
I’m in London on business.
I have a business appointment on Tuesday.
The business was growing so quickly it could barely keep up with all the orders coming in.
My partner is in the frozen food business.
Paulina left her job in finance in order to start her own daycare business because she believed it would allow her to spend more time with her own children.
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This glossary post was last updated: 28th March, 2020