Question

Q3. Which of the following is not a characteristic of business?
(a) Production (b) Exchange or sale
(c) Wages or salaries (d) Risk element​

Answer 1

Answer: Option C - Wages or salaries is not a characteristic of the business.

Business is an activity that is engaged in the primary or the main purpose of making a profit, salaries, and wages are expenses or payments to a business. Therefore it is not characteristic of business and not a primary activity of it.

Explanation:

1. The major difference between a salary and a wage is that a salaried person is getting paid a fixed rate per pay time period and a wage earner is getting paid by the work hour. A person who is paid a salary is paid a fixed rate in each pay time period, with the net of these fixed payments over a whole year added to the amount of the salary.

2. Salary is always a fixed cost whereas wage is a variable cost.

Answer 2

Answer:

Option c - Wages or salaries are not a characteristic of the business.

Explanation:

• The business is set, its primary purpose is making a profit.
• salaries or wages are paid to employees who work for the organisation.
• It is a remuneration, not a characteristic of a business.
• Wages are not proof of business activity.
• Wages are considered expenses, they are secondary.
• Business activity is to make profits.

Hence, wages or salaries are not a characteristic of the business.