Write four differences between Profession and business.
Answers
Answer:
Key Differences Between Business and Profession
The following points are noteworthy so far as the difference between business and profession is concerned:
An economic activity concerned with the production or purchase and sale merchandise and rendering of services with the purpose of earning profit is called business. A form of economic activities, wherein special skills, knowledge, and expertise is required to be applied by the person, in his occupation is known as the profession.
The primary objective of a business is to earn profit whereas profession is aimed at providing services.
A business can be established by the decision of the entrepreneur and after fulfilling certain legal formalities. On the other hand, profession requires membership of the respective professional body and certificate of practice, for the establishment.
Any person can start his business; there is no minimum qualification to run a venture. On the contrary, specialised knowledge of study, training and expertise is the major requirement for the profession.
A business requires capital investment according to its size and nature. Unlike, profession whose capital requirement is limited.
A businessman gets profit as a return for the work done by him/her. Conversely, a professional gets a fee for the services rendered by him/her.
In business, there is no prescribed code of conduct. As opposed to the profession, the code of conduct is prescribed by the professional bodies which must be followed.
In general, every business advertises its products and services, for the purpose of increasing sales. As against this, the advertisement is strictly prohibited as per professional code of conduct.
In business, transfer of interest is common, like transfer of business by the father to his son. In contrast to the profession, where transferability is not possible as it requires specialised skill and knowledge.
Business and risk go hand in hand, so the risk factor is always present in business. On the other end, the risk factor may or may not be present in a profession.
Explanation:
1. Meaning
Business is an economic activity where people sell goods or services.
Profession is an economic activity where people work with their knowledge and skill.
2. Qualification
No minimum qualification is required in case of business.
Educational or professional degree or specified knowledge is required in case of profession.
3. Transfer of interest
Transfer of interest is possible in case of business.
Generally transfer of interest is not possible in case of profession.
4. Accounting Type
Generally, Manufacturing / Trading / Profit & Loss a/c is maintained in case of Business.
Generally, Income & Expenditure a/c is maintained in case of Profession.
5. Reward
Reward for business is known as ‘profit’
Reward for profession is known as ‘professional fee’