ACCT1101 - Lecture 1

Describe how businesses create value 4 a common

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Unformatted text preview: ion is to help users make decisions about economic help users make decisions about economic activities. activities. 26 3. Compare the main types of organisations and explain their purpose. An organisation is a g ro up o f p e o p le wh o wo rk to g e th e r to d e ve lo p , p ro d uc e , a nd o r d is trib ute g o o d s o r s e rvic e s . Why do organisations exist? Goals are too complex, too large or too expensive to be achieved without co­operation. 27 Organisations differ as to the types of goods and services they offer Organisations differ as to the types of goods and services they offer (and if “profit” is a goal). Hybrids (eg., retail + service) ACCT1101 will be confined to business organisations 4. Describe how businesses create value 4. A common purpose of organisations: to transform resources from one form to another (goods and services) … What resources? Any: natural, physical and financial resources, management skills, labour, information… 29 Because resources are in scarce supply they should be used wisely. Who decides the allocation of scarce resources used and produced by organisations? produced Markets perform an allocation function and competition determines the amount and value of resources available for exchange. Market is any location or process that permits resources to be bought and sold How? How? The price paid for a resource is the measure of value placed on the item in a competitive market. 30 Let’s briefly consider the different types of markets organisations compete in… markets Input Markets Financial Markets – for financial resources Supplier Markets – for resources needed to produce goods and/or services Output Markets Product Markets – for goods and services which determines the prices of goods and services available to customers All markets allocate scarce resources. 31 What is the purpose of the transformation of resources? To create value To How value is created? Value is created when resources in existing form are transformed to Value another more valuable form. If the transformation of resources meets a need of society creates value because more people are better off after the transformation than befor...
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This note was uploaded on 08/11/2013 for the course ACCT 1101 taught by Professor Ajay during the One '12 term at Queensland.

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