Business Services
Meaning
Business services support business operations without necessarily producing physical goods. Banking, insurance, transportation, warehousing and communication are important examples.
Banking
Banks accept deposits, provide loans and advances, facilitate payments and offer other financial services. Common deposit accounts include savings, current, recurring and fixed deposits.
Insurance
Insurance provides financial protection against specified risks in return for a premium. Important principles include utmost good faith, insurable interest, indemnity, contribution, subrogation and causa proxima, subject to the nature of the insurance contract.
Warehousing
Warehouses store goods safely and help bridge the gap between production and consumption. They can provide services such as grading, packing and financing support through warehouse receipts.
Communication
Communication services allow information and business instructions to move between producers, suppliers, customers and other stakeholders.
Explained MCQs
- Why is insurance not simply a method of earning profit?
Answer: Its primary business function is risk protection through transfer and pooling of specified risks.
Explanation: The insured pays a premium so that the insurer undertakes contractual risk according to policy terms. - Which bank account is generally designed for frequent business transactions?
Answer: Current account.
Explanation: Current accounts are designed for frequent deposits and withdrawals, subject to bank terms.