Explain any two business activities which are auxiliaries to trade.
(i) Transport, banking, insurance, warehousing and advertising are regarded as auxiliaries to trade.
(i) These are services that help in removing various hindrances which arise in connection with the production and distribution of goods.
Two such business activities that are auxiliary to trade are(i) Transport and Communication
(i) Insurance
Transport and Communication
(i) Production of goods generally takes place in particular locations but these goods are required for consumption in different parts of the country.
(i) Transportation helps in movement of raw material to the place of production and the finished goods from factories to the place of consumption.
(i) Along with the transport facility, there is also a need for communication facilities so that producers, traders and consumers may exchange information with one another. Thus, postal services and telephone facilities may also be regarded as auxiliaries to business activities
Insurance
(i) Business involves various types of risks. Factory building, machinery, furniture etc. must be protected against fire, theft and other risks.
(i) Materials and goods held in stock or in transit are subject to the risk of loss or damage.
(i) Employees are also required to be protected against the risks of accident and occupational hazards.
(i) Insurance provides a protection cover in all such cases against a premium that they charge.
Tips: -
Other activities included as Auxiliary Industry - Banking, Finance, Warehousing, Advertising.
