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A company is an association of persons formed for carrying out business activities and has a legal status independent of its members. 

Features of Joint stock company are: 

(a) Separate legal entity: From the day of its incorporation, a company acquires an identity, distinct from its members. Its assets and liabilities are separate from those of its owners. 

(b) Artificial person : A company is a creation of law and exists independent of its member. Like natural persons ,a company can own property ,incur debts, borrow money ,enter into contracts. It is, therefore, called an artificial person.

Securities and Exchange Board of India.

The main functions of commercial banks are accepting deposits from the public and advancing them loans. However, besides these functions there are many other functions which these banks perform. All these functions can be divided under the following heads: 

1. Accepting Deposits: The most important function of commercial banks is to accept deposits from the public. Various sections of society, according to their needs and economic condition, deposit their savings with the banks. Generally, there are three types of deposits which are as follows:

• Saving Bank Account: These account are introduced by the bank to mobilise small saving of low and middle income group of people. The saving account’ is generally opened in bank by salaried persons or by the persons who have a fixed regular income. 
• Current account: This account is opened by businessmen who have a higher number of regular transactions with the bank. 
• Recurring Deposit Account: In recurring deposit account, certain fixed amount is invested every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.
• Fixed Deposit Account: If the money deposited by customer with a bank for a fixed period of time for a fixed rate of interest. It is repayable on expiry of specified period of time.

2. Giving Loans: The second important function of commercial banks is to advance loans to its customers. Banks charge interest from the borrowers and this is the main source of their income. Banks advance loans not only on the basis of the deposits of the public rather they also advance loans on the basis of depositing the money in the accounts of borrowers. In other words, they create loans out of deposits and deposits out of loans. This is called as credit creation by commercial banks.

Banks generally give following types of loans and advances:

• Bank Overdraft: An overdraft is an advance given by the bank allowing a customer to overdraw his current account up to an agreed amount. interest is charged at an agreed rate only on the amount overdrawn. 
• Cash Credits: Cash credit is a short term cash loan to a company. It is a financial accommodation under which an advance is granted on a separate account called cash credit account up to a specified limit. 
• Demand Loans: These are such loans that can be recalled on demand by the banks. The entire loan amount is paid in lump sum by crediting it to the loan account of the borrower, and thus entire loan becomes chargeable to interest with immediate effect. 
• Short-term Loans: These loans may be given as personal loans, loans to finance working capital or as priority sector advances. These are made against some security and entire loan amount is transferred to the loan account of the borrower.

Discounting of Bills of Exchange: It is a short term finance assistance extended by the bank usually to the businesses that they have current account with bank. When a bill of exchange is presented before the bank for encashment, bank credits the amount to customer’s account after deducting some discount, On maturity of the bill, the payment is received by the bank from the drawee. 

3. Investment of Funds: The banks invest their surplus funds in three types of securities such as Government securities, other approved securities and other securities.

• Government securities include both, central and state governments, such as treasury bills, national savings certificate, etc. 
• Other securities include securities of state associated bodies like electricity boards, housing boards, debentures of land development banks units of UTI, shares of regional rural banks, etc.

4. Agency Functions: Banks function in the form of agents and representatives of their customers. Customers give their consent for performing such functions. The important functions of these types are as follows:

• Banks collect cheques, drafts, bills of exchange and dividends of the shares for their customers. 
• Banks make payment for their clients and at times accept the bills of exchange of their customers for which payment is made at the fixed time. 
• Banks pay insurance premium of their customers. Besides this, they also deposit loan instalments, income-tax, interest, etc. as per directions. 
• Banks purchase and sell securities, shares and debentures on behalf of their customers. 
• Banks arrange to send money from one place to another for the convenience of their customers.

5. Miscellaneous Functions: Besides the functions mentioned above, banks perform many other functions of general utility which are as follows:

• Banks make arrangement of lockers for the safe custody of valuable assets of their customers such as gold, silver, legal documents, etc. 
• Banks give reference for their customers. 
• Banks collect necessary and useful statistics relating to trade and industry. 
• For facilitating foreign trade, banks undertake to sell and purchase foreign exchange. 
• Banks advise their clients relating to investment decisions as specialist. 
• Bank does the under-writing of shares and debentures also. 
• Banks issue letters of credit. 
• During natural calamities, banks are highly useful in mobilizing funds and donations.

Correct option: b. Brick & Motor Retailing

Land pollution.

Merits: 

From Shareholders Point of View: 

• The equity shareholders are the owners of the company. 
• It is suitable for those who want to take risk for higher return. 
• The value of equity shares goes up in the stock market with the increase in profits of the concern. 
• Equity shares can be easily sold in the stock market. 
• The liability is limited to the nominal value of shares. 
• Equity shareholders have a say in the management of a company as they are conferred voting rights.

From Management Point of View: 

• A company can raise capital by issuing equity shares without creating any charge on its fixed assets. 
• The capital raised by issuing equity shares is not required to be paid back during the lifetime of the company. It will be paid back only when the company is winding up. 
• There is no binding on the company to pay dividend on equity shares. The company may declare dividend only if there is enough profits. 
• If a company raises more capital by issuing equity shares, it leads to greater confidence among the creditors.

Demerits:

• As equity capital cannot be redeemed, there is a danger of over capitalisation. 
• The dividend which a shareholder receives is neither fixed nor controllable by him. The management of the company decides how much dividend should be given. 
• Equity share investment is a risky share compared to any other investment. 
• Equity shareholders get dividend only if there remains any profit after paying debenture interest, tax and preference dividend. Thus, getting dividend on equity shares is uncertain every year. 
• Issue of fresh shares reduces the earnings of existing shareholders. 
• Cost of equity is the high when compared to other sources of finance.

Merits:

1. Limited capital requirement: Mail order business does not require heavy expenditure on building and other infrastructural facilities. Therefore, it can be started with relatively low amount of capital. 

2. Elimination of middle men: The biggest advantage of mail order business from the point of view of consumers is that unnecessary middlemen between the buyers and sellers are eliminated. This may result in lot of savings both to the buyers as well as to the sellers. 

3. Wide reach: Under this system the goods can be sent to all the places having postal services. This opens wide scope for business as a large number of people throughout the country can be served through mail. 

4. Convenience: Under this system goods are delivered at the doorstep of the customers. This results in great convenience to the customers in buying these products. 

5. Absence of bad debt: Since the mail order houses do not extend credit facilities to the customers, there are no chances of any bad debt on account of non-payment of cash by the customers.

Limitations:

1. No credit: Super markets sell their products on cash basis only. No credit facilities are made available to the buyers. This restricts the purchasing power of buyers from such markets.

2. No personal attention: Super markets work on the principle of self-service. The customers, therefore, don’t get any personal attention. As a result, such commodities that require personal attention by sales people cannot be handled effectively in super markets. 

3. Mishandling of goods: Some customers handle the goods kept in the shelf carelessly. This may raise costs in super markets.

4. High overhead expenses: Super market incurs high overhead expenses. As a result these have not been able to create low price appeal among the customers. 

5. Possibility of abuse: This type of business provides greater possibility of abuse to dishonest traders to cheat the customers by making false claims about the products or not honoring the commitments made through hand bills or advertisements. 

6. High dependence on postal services: The success of mail order business depends heavily on the availability of efficient postal services at a place. But in a vast country like ours, where many places are still without postal facilities, this type of business has limited prospects.

1. Trade enquiry: The importing firm approaches the export firms with the help of trade enquiry they collecting information about their export prices and terms of exports. After receiving a trade enquiry, the exporter will prepare a quotation called proforma invoice. 

2. Procurement of import licence: There are certain goods that can he imported freely, while others need licensing. The importer needs to consult the Export Import (EXIM) policy in force to know whether the goods that he or she wants to import are subject to import licensing.

3. Obtaining foreign exchange: Since the supplier in the context of an import transaction resides in a foreign country. he/she demands payment in a foreign currency. Payment in foreign currency involves exchange of Indian currency into foreign currency.

4. Placing order or indent: After obtaining the import licence, the importer places an import order or indent with the exporter for supply of the specified products. The import order contains information about the price, quantity size, grade and quality of goods ordered and the instructions relating to packing, shipping, ports of shipment and destination etc.

5. Arranging for finance: The importer should make arrangements in advance to pay to the exporter on arrival of goods at the port. Advanced planning for financing imports is necessary so as to avoid huge demur rages (i.e.. penalties) on the imported goods lying uncleared at the port for want of payments.

6. Obtaining letter of credit: If the payment terms agreed between the importer and the overseas supplier is a letter of credit, then the importer should obtain the letter of credit from its bank and forward it to the overseas supplier.

7. Receipt of shipment advice: After loading the goods on the vessel, the overseas supplier dispatches the shipment advice to the importer. A shipment advice contains information about the shipment of goods.

8. Retirement of import documents: Having shipped the goods, the overseas supplier prepares a set of necessary documents as per the terms of contract and letter of credit and hands it over to his or her banker for their onward transmission and negotiation to the importer in the manner as specified in the letter of credit.

9. Arrival of goods: Goods are shipped by the overseas supplier as per the contract. The person in charge of the carrier (ship or airway) informs the officer in charge at the dock or the airport about the arrival of goods in the importing country. It provides the document called import general manifest. Import general manifest is a document that contains the details of the imported goods.

10. Customs clearance and release of goods: All the goods imported into India have to pass through customs clearance after they cross the Indian borders. Customs clearance is a somewhat tedious process and calls for completing a number of formalities. It is, therefore, advised that importers appoint C&F agents who are well versed with such formalities and play an important role in getting the goods customs cleared.

Direct to Home. 

Huge capital resources.

Co-operative Society.

Economic activities are those by which we earn our livelihood. 

Five institutions which support small business in India are: 

1. National Bank for Agriculture and Rural Development (NABARD). 

2. National Small Industrial Corporation (NSIC). 

3. Small Industrial Development Bank of India (SIDBI). 

4. Rural and Women Entrepreneurship Development (RWED). 

5. District Industries Centres (DICs)

(a) (ii) a politician 

(b) (ii) physically strong

Five important sources of finance available for a business organization: 

1. Owner’s fund: 

• Equity shares 
• Retained earnings. 

2. Borrowed funds:

• Debenture 
• Loans from banks 
• Loans from financial institution 
• Public deposit 
• Lease financing.

Best Common Sources of Financing Your Business or Startup are:

1. Personal Investment or Personal Savings
2. Venture Capital
3. Business Angels
4. Assistant of Government
5. Commercial Bank Loans and Overdraft
6. Financial Bootstrapping
7. Buyouts

A public company has to undergo four stages before commencing the business. 

These are discussed below: 

1. Promotion: Promotion includes all the steps from conception of an idea to starting of the Company, till it is formed. These include identifying business opportunity, performing feasibility studies. This stage also deals with decision of the name and appointing of bankers, lawyers, etc. who assist in preparation of necessary documents. 

2.Incorporation of the Company: The firm will furnish documents like Memorandum of Association, Articles of Association, Name and Address of Registered Office to name a few along with a fee with the Registrar of Companies Act 1956 along with a prescribed fees. A certificate of incorporation is issued along with Corporate Identity Number to the company. 

3. Capital Subscription: A public company has to raise funds in the form of shares or debentures from the public in this stage. It will seek SEBI approval and file a prospectus for inviting the investors to invest in the company. A Company can start the allotment of shares only when minimum number of shares has been subscribed and application money is received. As per Company Act the minimum subscription should be 90% of the issued capital. After the allotment and refund process, the names and address of the shareholders are shared with the Registrar. 

4. Commencement of business: After issuing the shares and receiving minimum subscription, a Public Company applies to Registrar for issue of ‘Certificate of Commencement of Business’.

By scientific management workers Benefitted. 

Finance function is recognized as a separate function of an organization as it is a very important function. 

The objectives of the financial management are as follows: 

a. Finance function is responsible for raising funds from different sources. These sources include long term sources like bank loan, venture capital, Owner’s equity, share market. The short term sources include bank overdraft, short term loans, etc. 

b. Personnel in the finance function are responsible for recording the financial transactions, generating financial reports and further reporting them for decision making. 

c. The finance function also takes care of disbursing funds for different business operations. For instance funds are needed for procuring raw materials, machinery, paying bank interest and dividend to the shareholders 

d. The personnel in the financial function should also act as an advisory to other departments for facilitating the decrease in the expenses and suggesting avenues for increasing profits.

Head of the Hindu Undivided Family Business is called Karta. 

Correct option is: (B) Decreased

By scientific management working hours of workers are decreased.

Trade refers to buying and selling of goods is called trade.

Equity Shares: 

1. Equity shares represent the ownership of a company and thus the capital raised by issue of such shares is known as ownership capital or owner’s funds.

2. Equity shares are shares, which do not enjoy any preferential right in the matter of claim of dividend or repayment of capital.

3. Equity shareholders are regarded as the owners of the company who exercise their authority through the voting rights they enjoy.

Preference Shares:

1. The capital raised by issue of preference shares is called preference share capital.

2. The preference shareholders enjoy a preferential position over equity shareholders in two ways:

(i) Receiving a fixed rate of dividend, out of the net profits of the company, before any dividend is declared for equity shareholders. 

(ii) Receiving their capital after the claims of the company’s creditors have been settled, at the time of liquidation.

3. In other words, as compared to the equity shareholders, the preference shareholders have a preferential claim over dividend and repayment of capital. Preference shares resemble debentures as they bear fixed rate of return. Also as the dividend is payable only at the discretion of the directors and only out of profit after tax, to that extent, these resemble equity shares.

4. Thus, preference shares have some characteristics of both equity shares and debentures. Preference shareholders generally do not enjoy any voting rights.

A business letter is a letter written in formal language for different official purposes. There are different types of business letters used for external business correspondence. 

They are discussed below:

•  Sales letter: A sales letter is a letter written to advertise and in due course sell a product or a service to the consumers. 
•  Information letters: They can be further divided into routine and special purpose letters. The routine letters include correspondence regarding enquiries, orders, payments, collection letters etc. Circulars, personnel letters are included in special purpose letters.
•  Complaint Letter: Business complaint letter is written by customers who are not satisfied by the levels of consumer services provided 
•  Goodwill Letters: Business enterprises as part of image development and to better connect with the stakeholders write goodwill letters to them. Thank you; Congratulatory letters are examples of the goodwill letters.

Industry is the major source for pollution.

1. Boot strapping : Commonly known as self financing, it is considered as the first funding option because by stretching out your personal savings and resources, you are tied to your business. 

2. Crowd funding : It is the pooling of resources by a group of people for a common goal. 

3. Angel investment: Angel investors are individuals with surplus cash who have keen interest to invest in upcoming startups. They also offer mentoring or advice alongside capital. 

4. Venture capital : There are professionally managed funds which are invested in companies that have huge potential.

1. Friends and Family

Borrowing money from friends and family is a classic way to start a business. While it may be harder to convince investors or banks of the quality of your idea, your family and friends often believe in your dream.

They may be more willing to help fund your company. If you do go to friends and family for loans, it’s a good idea to make sure that each of you gets sound legal advice, especially if you are taking the money as a loan.

The downside? Borrowing money is a quick way to lose friends and sour family relationships. Be careful if you decide to proceed this way.

2. Small Business Loans

Some banks specifically offer loans to small businesses, but banks historically are careful about giving money to small companies. It can be difficult to qualify. There are alternative lending companies, however, who may be better equipped to help you get your business off the ground.

The downside? Some of those alternative lending companies are predatory. Make sure you know who you’re borrowing from before you sign on the dotted line.

3. Trade Equity or Services

Looking to get some web design done? See if you can barter with your neighbor who does some freelancing on the side. Perhaps you’ll help him with some marketing advice down the road. In virtually every city, there are communities of fledgling business owners who can work together.

The downside? Trading services or equity can be an awful way to make a living, and so not everyone is willing to do it. Don’t be offended if your Number One choice says no way.

4. Bootstrapping

One of the most common ways to get a business up and running is through “bootstrapping.” Basically, you use your own funds to run your business. This money may come from personal savings, low or no interest credit cards, or mortgages and lines of credit on your home.  Getting a free credit report card will help you assess where you financially stand.  Knowing this will help you figure out the interest rate you will get on loans, which can give you access to affordable credit.

1. Finance: The most serious problem faced by SS Is is that nonavailability of adequate finance to carry out their operations. 

2. Raw materials: Another major problem of small business is the procurement of raw materials. If the required materials are not available, they have to compromise on the quality or have to pay a high price to get good quality materials. They purchase raw materials in small quantities due to lack of storage capacity and hence their bargaining power is low.

3. Managerial skills: Small business is generally promoted and operated by’ a single person. who may not possess all the managerial skills required to run the business.

4. Less productive labor: Small business firms cannot afford to pay high salaries to their employees, which affects employee willingness to work. Thus, productivity per employee is relative low and employee turnover is generally high.

Difference between Private Company and Public Company :

(a) Absolute cell reference.

The payment mechanism most typed to e-business is e-cash.

Trial balance is not part of financial statements.

1. Finance: The most serious problem faced by SSIs is that nonavailability of adequate finance to carry out their operations. Small scale sector lacks the creditworthiness and collateral required to raise capital from the capital markets or financial institutions and hence they depend on local money lenders who charge high interest rates. 

2. Raw materials: Another major problem of small business is the procurement of raw materials. If the required materials are not available, they have to compromise on the quality or have to pay a high price to get good quality materials. They purchase raw materials in small quantities due to lack of storage capacity and hence their bargaining power is low.

3. Managerial skills: Small business is generally promoted and operated by a single person, who may not possess all the managerial skills required to run the business. Many of the small business entrepreneurs possess sound technical knowledge but are less successful in marketing and may not find enough time to take care of all functional activities. 

4. Less productive labour: Small business firms cannot afford to pay high salaries to their employees, which affects employee willingness to work. Thus, productivity per employee is relatively low and employee turnover is generally high. Small business organizations are unable to attract talented people because of lower remuneration. Division of labour cannot be practiced in small scale units, which results in lack of specialization and concentration.

(C ) Assets, Capital, Liabilities, Revenue and Expenses

Indian Banking Regulation Act 1949.

Cash Book subsidiary book serves both as Journal as well as ledger.

The important features of a sole-proprietary organization include the following: 

1. Individual Initiative: One person is the owner in a sole proprietorship. 

2. Risk Bearing: The proprietor is the sole beneficiary of profits as well as the losses. Thus, the risks of business are borne by the proprietor himself. 

3. Management and control: Management and control of this type of organization is the responsibility of the sole proprietor. 

4. Minimum government regulations: The government does not interfere with the working of the sole proprietorship organization. However, they have to comply with the general laws.

The five factor that should be considered while selecting a suitable form of business organisation are:

1. Cost 

2. Liability 

3. Continuity 

4. Management ability 

5. Degree of control 

6. Capital consideration 

7. Nature of business. 

Services of retailers towards customer are: 

1. Regular availability of products: The most important service of a retailer to consumer is to maintain regular availability of various products produced by different manufacturers. 

2. New products information: By arranging for effective display of products and through their personal selling efforts, retailers provide important information about the arrival, special features, etc. of new products to the customers. 

3. Convenience in buying: Retailers generally buy goods in large quantities and sell these in small quantities, according to the requirements of their customers. 

4. Wide selection: Retailers generally keep stock of a variety of products of different manufacturers. This enables the consumers to make their choice out of a wide selection of goods.

51% is the minimum amount of capital.

 Purchase return immediately paid in cash would be entered into Cash Book.

Merits: 

• Ease of formation and closure: Like sole proprietorship, the partnership business can be formed easily without any legal formalities. 
• More funds: In a partnership, the capital is contributed by a number of partners. This makes it possible to raise larger amount of funds as compared to a sole proprietor and undertake additional operations when needed. 
• Sharing risks: The risks involved in running a partnership firm are shared by all the partners. This reduces the anxiety, burden and stress on individual partners. 
• Secrecy: A partnership firm is not legally required to publish its accounts and submit its reports. Hence it is able to maintain confidentiality of information relating to its operations.

Demerits:

• Limited capital: Since the total number of partners cannot exceed 20, the capital to be raised is always limited. It may not be possible to start a very large business in partnership form. 
• Lack of continuity of business: A partnership firm comes to an end in the event of death, lunacy or retirement of any partner. Even otherwise, it can discontinue its business at the will of the partners. At any time, they may take a decision to end their relationship. 
• Lack of public confidence: There is no governmental supervision over the affairs of the business of a partnership and publishing accounts is also not necessary. Hence, public may not have full confidence in them.
• Unlimited liability: The liability of each partner is not limited to the amount invested but his private property is also liable to pay the business obligations.

Merits:

• Central location: The super markets are generally located in the heart of the city. As a result, these are easily accessible to large number of people staying in the surrounding localities. 
• Wide selection: Super markets keep a wide variety of goods of different designs, colour, etc. which enables the buyers to make better selection. 
• No bad debts: As generally the sales are made on cash basis, there are no bad debts in super markets. 
• Benefits of being large scale: A super market is a large scale retailing store. It enjoys all the benefits of large scale buying and selling because of which its operating costs are lower. 
• One roof, low cost: Super markets offer a wide variety of products at low cost, under one roof. These outlets are, therefore, not only convenient but also economical to the buyers for making their purchases.

Limitations: 

• No credit: Super markets sell their products on cash basis only. No credit facilities are made available to the buyers. This restricts the purchasing power of buyers from such markets. 
• No personal attention: Super markets work on the principle of self-service. The customers. therefore, don’t get any personal attention. As a result, such commodities that require personal attention by sales people cannot be handled effectively in super markets. 
• Mishandling of goods: Some customers handle the goods kept in the shelf carelessly. This may raise costs in super markets.
• high overhead expenses: Super market incurs high overhead expenses. As a result these have not been able to create low price appeal among the customers. 
• Huge capital requirement: Establishing and running a super market requires huge investment. The turnover of a store should be high so that the overheads are kept under reasonable level. This can be possible in bigger towns but not in small towns.

Advantages of Sole Proprietorship: 

1. Quick decision making: A sole proprietor enjoys considerable degree of freedom in making business decisions. Further, the decision making is prompt because there is no need to consult others.

2. Confidentiality of information: Sole decision making authority enables the proprietor to keep all the information related to business operation confidential and maintain secrecy. 

3. Direct incentive: The need to share profits does not arise as he/she is the single owner. This provides maximum incentive to the sole trader to work hard.

4. Sense of accomplishment: There is a personal satisfaction involved in working for oneself. The knowledge that one is responsible for the success of the business not only contributes to self-satisfaction but also instills in the individual a sense of accomplishment and confidence in ones abilities.

Limitations of sole proprietorship:

1. Limited resources: Resources of a sole proprietor are limited to his/her personal savings and borrowings from others. Banks and other lending institutions may hesitate to extend a long term loan to a sole proprietor.

2. Limited life of a business concern: In the eyes of the law the proprietorship and the owner are considered one and the same. Death, insolvency or illness of a proprietor affects the business and can lead to its closure.

3. Unlimited liability: If the business fails, the creditors can recover their dues not merely from the business assets, but also from the personal assets of the proprietor. A poor decision or an unfavorable circumstance can create serious financial burden on the owners. 

4. Limited managerial ability: The owner has to assume the responsibility of varied managerial tasks such as purchasing, selling, financing, etc. It is rare to find an individual who excels in all these areas. Thus, decision making may not be balanced in all the cases. 

5. Competition of big industries: Now-a-days in a modern world demands are more. To full fill those numerous demands big industries were formed. By producing goods in large scale, supply them at low rates and also provide other number of facilities. As such sole trading concern unable to complete with them.

1. Receipt of enquiry and sending quotations: The prospective buyer of a product sends an enquiry to different exporters requesting them to send information regarding price, quality and terms and conditions for export of goods.

2. Receipt of order or indent: In case the prospective buyer finds the export price and other terms and conditions acceptable, it places an order for the goods to be dispatched. This order, also known as indent, contains a description of the goods ordered, prices to the paid, delivery terms, packing and marking details and delivery instructions.

3. Assessing importer’s credit’worthiness and securing a guarantee for payments: After receipt of the indent, the exporter makes necessary enquiry about the creditworthiness of the importer. The purpose underlying the enquiry is to assess the risks of non-payment by the importer once the goods reach the import destination. To minimise such risks, most exporters demand a letter of credit from the importer.

4. Obtaining export licence: Having become assured about payments, the exporting firm initiates the steps relating to compliance of export regulations. Export of goods in India is subject to custom laws which demand that the export firm must have an export licence before it proceeds with exports.

5. Obtaining pre-shipment finance: Once a confirmed order and also a letter of credit have been received, the exporter approaches his banker for obtaining pre-shipment finance to undertake export production. Pre-shipment finance is the finance that the exporter needs for procuring raw materials and other components. processing and packing of goods and transportation of goods to the port of shipment.

6. Production or procurement of goods: Having obtained the preshipment finance from the bank, the exporter proceeds to get the goods ready as per the specifications of the importer.

7. Pre-shipment inspection: he Government of India has initiated many steps to ensure that only good quality products are exported from the country. One such step is compulsory inspection of certain products by a competent agency as designated by the government. The government has passed Export Quality Control and Inspection Act, 1963 for this purpose.

8. Excise clearance: As per central excise tariff act. excise duty is required to he paid on the materials used in the production of goods meant for export. So if the exporter desires to produce the goods meant for export by himself, he has to pay the excise duty on the material materials used in production of goods for export and obtain export clearance from the concerned excise commissioner. For obtaining export clearance from the concerned excise commissioner exporter has to follow following steps:

(i) The exporter has to apply, to the concerned Excise Commissioner in the region with an invoice because according to the Central Excise Tariff Act, excise duty is payable on the materials used in manufacturing goods. If the Excise Commissioner is satisfied, he may issue the excise clearance.

(ii) But in many cases the government exempts payment of excise duty or later on refunds it if the goods so manufactured are meant for exports. This is done to provide an incentive to the exporters to export more and also to make the export products more competitive in the world markets. 

Storage costs that are not necessary in the production process prior to a further production stage is not the part of inventory cost as per AS – 2.

The budget sets a tone for the organization. It helps in forecasting the approach to the management for the coming years. It helps in determining whether the management planning is going to be aggressive or cut down on costs or it would maintain a steady pace.

It is important to keep a check on expenses. Organizations generally prepare the Profit & Loss budget which a management wants to track. Similarly, a working capital budget is also important to plan funds on a timely basis.

On the basis of the P&L budget and the working capital budget, a Balance Sheet is prepared. In the nutshell, budget helps in effective business planning and prepares a business for any upcoming challenges.