BUYING AND SELLING
Meaning of buying and selling :
Buying and selling can be defined as the process of exchanging goods or services for money or other compensation. Where buying involves acquiring items, and selling involves offering items in return for payment.
METHODS OF CONDUCTING TRANSACTION
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Buying by cash : This means paying for goods or services immediately with physical money or a direct electronic payment at the time of purchase.
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Selling by cash : This involves receiving immediate payment in cash or electronically for the goods or services provided.
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Buying by credit : This means obtaining goods or services with a promise to pay later, often using a credit card or loan.
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Selling by credit : This involves delivering goods or services with the expectation of receiving payment at a later date, typically outlined in a credit agreement or invoice.
KEY DETERMINANTS OF BUSINESS FINANCIAL PERFORMANCE
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Cost of Sale: Represents the expenses associated with producing or purchasing the goods that a business sells. It helps determine the profitability of products.
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Markup: Refers to the amount added to the cost of a product to set its selling price. It helps businesses cover costs and achieve profit.
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Turnover: Indicates the total revenue or sales generated by a business over a period. It measures the volume of business activity.
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Profit: The financial gain after subtracting all costs and expenses from total revenue. It shows the business's success in generating more revenue than costs.
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Loss: Occurs when total expenses exceed total revenue, indicating a decrease in financial health. It highlights a business's failure to cover costs with revenue.
