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1. Regular payment of taxes and duties. 

2. To avoid monopoly and concentration of economic power.

Four methods of brand promotions: 

1. Advertising. 

2. Personal Selling. 

3. Sales promotion. 

4. Publicity.

Business Entity Concept: In accounting, we treat a business or an organisation and its owners are two separately identifiable parties. This concept is called business entity concept. It means that personal transactions of owners are treated separately from those of the business. Business are organised either as a proprietorship, a partnership, or a company. They differ on the level of control the ultimate owners exercise on the business, but in all forms the personal transactions and accounts of the business. 

Maturity stage of a ‘Product Life Cycle’: After the introduction and growth stages, a product life cycle stages can be quite a challenging time for manufacturers. In the first two stages companies try to establish a market and then grow sales of their product to achieve as large a share of that market as possible. However, during the maturity stage, the primary focus for most companies will be maintaining their market share in the face of a number of different challenges. 

Challanges of the Maturity Stage: 

1. Sales Volume Peak. 

2. Decreasing market Share. 

3. Profits start to Decrease. 

Benefits: 

1. Continued Reduction in Costs. 

2. Increased Market share through differentiation.

(i) Maturity Stage : In maturity stage prices of the product fall and profits also fall due to high competitive pressures. Growth rate becomes stable and weak firms are forced to leave the industry. Heavy expenditure is incurred on promotion to create brand loyalty. Firms try to modify and improve the product, to develop new uses to the product and to attract new customers in order to increase sales. 

(ii) Abandonment Stage : This is the final stage of the product life cycle. In this stage, the firm abandons the product in order to make better use of its resources. As preferences of customers change, new and more innovative products replace the abandoned product. When the decline is fast, the product is abandoned by the firm. New products with unique features may be introduced. Some firms cannot bear the loss and sell out and discontinue the product.

The two uses of group discussions in selecting employees for a concern are as follows: 

1. In an interview, the candidate gets no opportunity to participate and show his leadership ability. 

2. Group discussion is widely used to screen candidates for admission into management schools.

1. It familiarises the new employees with the policies, rules and regulations of the organisation and the conditions of the job. 

2. It helps new employees to adjust quickly to new environment.

1. Right to replacement of the product. 

2. Right to rectification of the product.

The basic accounting principles are accepted and used by accountants all over the world. 

Some principles are as follows: 

1. Business Entity Concept: According to this concept, a business firm is treated as a unit, separate and distinct from its owners. A completely separate set of books is kept for the firm and business transactions are recorded from the firm’s point of view. Thus the capital provided by the owner is treated as a liability of the firm. Interest on capital is treated as an expense of business. Similarly money/goods drawn by the owner are treated as drawings. 

2. The Going Concern Concept: It is assumed that the business will continue to exist for a long time in the future. Transactions are recorded on the assumption that the business will exist for an indefinite period of time. It is on this assumption that a distinction is made between capital expenditure and revenue expenditure. Fixed assets are recorded at their original cost less depreciation. Market value of fixed assets is not recorded, as these assets are not to be sold in the near future.

Opportunity Cost means the benefit sacrificed for selecting a particular course of action. It is the maximum advantage that could be obtained if the resource was put to an alternative use. In other words, the opportunity cost of anything is the next best alternative that could be produced instead by the same factors or by an equivalent group of factors costing the same amount of money.

The two objectives of marketing are as follows: 

1. Creation of demand: A business firm can sell goods and services only when there are customers willing to buy them. The first purpose of marketing is to create demand for goods and services. 

2. Market Share: Every business firm seeks to have a reasonable share of the total demand, a competitive market, aggressive selling efforts are necessary to make products and services popular.

Internal stakeholders are those individuals and group who influences the enterprise from inside or within e.g. shareholder, employee. 

External stakeholders are those individuals and group who are a part of the firih’s external environment. They effect the firm’s activity from outside e.g. customer, suppliers.

The effect of crossing a cheque are as follows: 

1. Crossed cheques are considered a safer mode of payment because such cheques cannot be encashed at the bank counter. 

2. It is necessary to open an account in the bank to get its payment.

(i) The Dual Aspect Principle: According to this principle, every business transaction has a double (dual) effect on the business. This double effect can be recognized only by recording both the aspects of every transaction. There are two sides of every transaction. If one account is debited, any other account must be credited . and vice-versa. The system of recording transactions on the basis of this principle is known as Double Entry System. It is due to this principle that the two sides of the Balance Sheet are always equal. The following accounting equation will always hold good at any point of time. 

Assets = Liabilities + Capital 

OR 

Capital = Assets – Liabilities 

‘Whenever a transaction is recorded it must be recorded in two or more accounts to balance the equation. If a transaction increases or decreases one side of the equation, it will also decrease or increase the other side of the equation by the same amount. For example, if Rahul starts business with ₹ 1,00,000 in cash and takes a loan of ₹ 50,000 from the Bank and these ₹ 1,50,000 are used in buying a factory, 

the equation in this case is : 

Assets = Liabilities + Capital ₹ 1,50,000 = ₹ 50,000 + ₹ 1,00,000 

(ii) The Going Concern Concept: It is assumed that the business will continue to exist for a long time in the future. Transactions are recorded on the assumption that the business will exist for an indefinite period of time. It is on this assumption that a distinction is made between capital expenditure and revenue expenditure. Market value of fixed assets is not recorded, as these assets are not to be sold in the near future. 

A firm is said to be a going concern when there is neither the intention nor the necessity to wind up its affairs. In the absence of this assumption no outside parties would enter into long-term contracts with the firm for supplying funds and goods. 

This assumption also justifies the distinction between fixed assets and current assets. The going concern concept also implies that the existing liabilities will be paid at maturity. Unsold stock of goods are taken to the next year.

(a) The five factors influencing the choice of advertising media are: 

1. Nature of the Product: The product to be advertised is the main determinant of the advertising medium. Consumer Goods have a general and wide appeal. On the other hand industrial goods can be advertised better in specialised trade, technical and professional journal. 

2. Nature and Size of the Market: The geographical location or region, size of population and its purchasing power should be considered before Reflecting the media of advertisement. 

3. Objects of Advertising: The objectives of the advertising campaign are very important in deciding the medium of advertising. 

4. Circulation of Media: Newspapers and other media having wide circulation are useful when the message is to be conveyed to a very large number of people. 

5. Media used by Competitions: The media used by the suppliers of competitive or substitute products also influence the choice of the medium of advertisement. In order to face competition, it becomes necessary to advertise in media adopted by competitions. 

(b) The two basic elements of Human Relations are: 

1. Persuasion is an important element of public relations. It is through some kind of communication that persuasion takes place. To persuade means to convince another person of same idea, product, service or institution, to induce a person or group or to do something. We are all engaged in persuasion. 

2. Dialogues means a conversation between two persons with a purpose. If a person goes on talking without allowing others to participate in the discussion or talk, then it becomes a monologue. Democracy and freedom cannot survive without discussion and debate. In a dialogue each person presents facts and views and considers the facts and views presented by others.

Central bank means the bank which regulates the entire banking system in a country and carries out its monetary policy. Central bank is the apex bank, and every country has a central bank. Reserve Bank of India is the central bank of our country. It was set up in 1935 under the Reserve Bank of India Act, 1934. As the central bank,

 the Reserve Bank of India performs the following functions : 

(i) Monopoly of Note Issue: Generally the central bank of a country has the monopoly , to issue currency notes. Government grants the exclusive right to the central bank to issue notes on its behalf. In India, one rupee notes are issued by the Ministry of Finance. All other currency notes are issued by the Reserve Bank of India. In order to inspire public confidence in paper currency, the central bank keeps reserves of gold and silver against the issue of notes. 

(ii) Controller of Credit : Commercial banks create credit by lending money. They may create too much or too little credit. The level of credit in the country causes fluctuations in the price level. It becomes necessary to exercise control over credit so as to ensure stability in the economy. The central bank exercises strict control on the credit granting capacity of commercial banks. This is the most important function of a central bank. Credit control is both qualitative and quantitative in nature. 

(iii) Lender of the Last Resort: Whenever a commercial bank needs financial assistance, it may borrow from other commercial banks. But other commercial banks may not be in a position to provide funds to the bank in need. In such a case the central bank provides funds to a commercial bank either by granting loans or by purchasing its securities. In this way the central bank acts as the lender of the last resort.

Total Cost describes the total economic cost of production and is made up of variable costs, which vary according to the quantity of a good produced and includes inputs such as labour and raw materials, plus fixed costs, which are independent of the quantity of a good produced and include inputs that can not be varied in the short term such as building and machinery.

Distinction between Receipts and Payments Account and Income and Expenditure Account.

(a) The four factors that Mr. Shaw should consider in selecting a suitable media to advertise are as follows: 

1. Nature of the product: Consumer products of daily uses are generally advertised in newspapers, magazines, radio.

2. Nature of the market: Fairs and exhibitions, outdoor displays are more useful for advertising in local markets. 

3. Type of consumers: Radio, Television and Cinema are more suitable for advertising to illiterate people. Newspapers, magazines are useful for advertising to literate people. 

4. Life of advertisement: Long life advertisements can better be conveyed through magazines, outdoor displays. Short advertisements should be transmitted through newspapers, radio and television. 

(b) Brand means any identification work used to identify the product of a seller and to differentiate it from the products of competitors. A registered brand is known as a trademark. Dalda ghee, Lux soap are examples of brands. 

(c) The two factors to be kept in mind while selecting a good ‘Brand name’ are: 

1. The brand name must be supple; easy to pronounce and spell and remember. e.g., Lux, VTP, Rin etc. 

2. Type of the product: It should suggest the use of the product and should be unique.

Place mix relates to distribution of products is an important element of marketing mix. A channel of distribution or trade channel is the route or path along which products flow from the point of production to the point of ultimate consumption or use. It starts with the producer and ends with the consumers. In between there may be several intermediaries or middlemen who operate to facilitate the flow of the physical product or its ownership from the producer to the consumer. 

Components of Place Mix: 

(1) Channels of distribution and 

(2) Physical distribution. 

1. Channels of distribution: Channels of distribution are the routes through which goods move from the producer to consumers. A firm has to decide whether to sell directly or to sell through middlemen. The number and type of middlemen have also to be decided. 

2. Physical distribution: Physical distribution includes all those activities which are involved in moving products or services from manufacturers to consumers. It consists of transportation and storage of goods.

Unfair Trade Practice means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services (adopts any unfair method or unfair or deceptive practice including any of the following practices). 

The four rights of consumers are as follows: 

1. Right to safety: This is the right to be protected against the marketing of goods which are hazardous to life and property. These are various risks involved in the consumption and use of products, such as food, drugs, etc. 

2. Right to be informed: The consumer has the right to be informed about the quality, quantity, potency, purity, standard he intends to purchase. 

3. Right to choose: The consumer should be assured access to a variety of goods at competitive prices. There should be freedom to choose from alternative products. This requires free competition in the market.

4. Right to be heard: The consumer has a right to register his dissatisfaction and get his complaint heard at appropriate forums. This r right includes the right to make protest.

The five features of income and expenditure account are as follows: 

1. It is prepared at the end of an accounting period. 

2. It contains revenue items only. 

3. It is prepared on an accrual basis. 

4. Income and Expenditure A/c is prepared in the same manner in which Profit and Loss A/c is prepared. 

5. It is a nominal A/c. The rule of nominal A/c (debit all expenses and losses and credit all income and gains).

(a) Against: 

1. Publicity not backed by good action is unethical. It will damage rather than improve the image of the organization. 

2. Accurate and timely communication with the public is essential for good public relations. 

(b) Against: 

1. Every business transaction has a double effect on the business. This double effect can be recognised only by recording both the aspects of energy transaction. If one account is debited, any other account must be credited and vice-versa. 

2. It is due to the principle of Dual Aspect that the two sides of Balance Sheet are always equal. 

(c) Against: 

1. Training helps to improve the quantity and quality of work performance. Welltrained employees produce more and better goods. 

2. By training, employees learn new and better methods of doing jobs. They make better use of materials and machinery. As a result, wastage of resources and cost of production are reduced 

(d) For: 

1. Banking is a service based industry trying to satisfy the needs of the customer. 

2. Banking is relationship oriented as there is an agency relationship between the banker and the customer based on mutual trust and confidence. 

(e) Against: 

1. Public relations is an essential element in the communication system that enables individuals to be informed on many aspects of subjects that affect their lives. 

2. Public relations helps promotion of a company s goods oi services and builds up image.

Marketing demand means the aggregative demand of all the consumers in the market for a commodity or service at a particular price. Market demand is always defined with reference to a price and a time period.

The two methods of marketing research are as follows:

1. Observation Method: Observation refers to the process of recognising and noting facts or events. Under this method, the behaviour of consumers is watched through personal observation or mechanical devices. It avoids the pitfalls of questioning such as interference in the consumer’s activity, bias of the interviewer and distortion due to the consciousness of being questioned. 

2. Experimentation method: Under this method, a control market is established in which all forces except those being tested are kept under check. It seeks to test a theory or to find consumer’s reactions. The method involves a large expenditure of time and money. It requires skilled investigators. Moreover, it is difficult to select test markets and to control the variables.

The five methods tcuimprove industrial relations are as follows: 

1. Sound personnel policies: Policies and procedures concerning the compensation, transfer, promotion, etc. of employees should be fair and transparent. All policies and rules relating to industrial relations should be clear to everybody in the enterprise and to the union leaders. 

2. Constructive attitudes: Both management and trade unions should adopt positive attitudes towards each other. Management must recognise union as the spokesman of worker’s grievances. The employer should accept workers as equal partners in a joint endeavour. 

3. Participative management: Employers should associate workers and unions in the formulation and implementation of personnel policies and practices. Management should convince workers of the integrity and sincerity of the company. 

4. Employees welfare: Employers should recognise the need for the welfare of workers. They qiust ensure reasonable wages, satisfactory working conditions and development and other necessary facilities for labour. 

5. Grievance procedure: It provides an outlet for tensions and frustrations of workers, similarly, a suggestion scheme will help to satisfy the creative urge of workers.

(i) Current Assets – Trade Receivables 

(ii) Current Liabilities – Other Current Liabilities 

(iii) Current Liabilities – Trade Parables 

(iv) Current Liabilities – Short term Provisions 

(v) Current Assets – Inventories

Brand means any identification mark (such as trade name, mark, symbol, picture, design, colour etc.) used to identify the product of a seller and to differentiate it from the products of competitors. 

Branding is the process of assigning a: distinctive name to the product by which it is to be known and remembered. It is the process by which a product is branded. It is a general term concerning various activities such as giving a brand name to a product, designing a brand mark and popularising it.

(a) Marketing operates within the framework of total environment which comprises economic, social, legal, political and other forces. Marketing is required in business as well as in social and other organisations. 

(b) Promotion Mix consists of all the. activities aimed at persuading customers to buy the product. 

The various elements of promotion mix are: 

1. Advertising. 

2. Personal Selling. 

3. Sales Promotion. 

4. Publicity. 

(c) 1. Salesmanship involves direct, personal or face-to-face contact between the seller or his representative and the buyers. 

2. It involves contact with a limited number of persons.

(d) The need for communication between business enterprises and their public is being increasingly recognised. Public relations functions is required to bridge this communication gap.

(e) 1. The labour which can be wholly and directly identified with a particular product is called direct labour whereas indirect labour means the labour which cannot be wholly and directly identified with a particular product. 

2. Direct labour includes labour engaged in actual production of the product whereas indirect labour is the labour employed for performing tasks incidental to manufacture.

(i) Public Deposits → Non-current liabilities → Long term borrowings 

(ii) Calls-in-Advance → Current liabilities → Other current liabilities 

(iii) Building under construction → Non-current assets → Capital work-in progress

Two differences between recruitment and training:

The difference between training and education are as follows: 

1. The purpose of education is general whereas training has a specific and immediate purpose of making a person proficient in a particular job. 

2. Education involves formal instruction in school or college whereas training can be given on the job itself. 

3. Education is generally theoretical whereas training is practical in nature. 

4. The cost of education is generally paid by the government and the student whereas the cost of training is generally borne by the employer. 

5. Training is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased. Whereas education is the process of increasing the general knowledge and understanding of employees.

Management is universal in the sense that it is a common and essential element in all enterprises. 

Management is universal in the following sense : 

• First, managerial skills are transferable from one person to another. 

• Secondly, management skills can be transferred from one organization to another. 

• Thirdly, managerial skills can be imported and exported from one country to another.

It is important for both the job applicant and the organisation to ensure that the right job goes to the right person. Taking the wrong job may be just as disastrous for the employee as for the organisation. Recruitment and selection, therefore, involves the organisation (represented by the manager) and the applicant trying to discover the extent to which their separate interests are likely to be served by the appointment. In other words, it is a two-way process.

Macroeconomics is the study of the behaviour of the economy as a whole. Macroeconomics deals with national income, employment, savings, investment, exports and imports of a country etc.

The halo effect is when our impression of someone is skewed by one positive trait, leading us to make generalizations about them as a whole. In short, the halo effect describes our tendency to think someone is good in lots of areas if they’ve impressed us in one area.

(a) Joint-stock companies shares are freely transferable. All shareholders are free to transfer their shares without the consent of anyone. 

(b) The liability of the members of a Joint-stock co.are limited to the face value of the shares they possess or to the amount of guarantee accepted by them.

The business environment is a mixture of complex, dynamic and uncontrollable external factors within which a business is to be operated.

e-Banking services have the following advantages : 

• Customer can do transactions 24 × 7 basis. 

• e-Banking transactions are online and almost instantaneous. 

• Customer can do transactions from anywhere: from his home or workplace using a computer or laptop or mobile, he has no need to visit his bank branch.

The two disadvantages of washing cereals and fruits are: 

• When cereals like rice or cut fruits are washed, vitamin-B complex also washes away from them. 

• After washing, food should be consumed immediately in order to avoid food spoilage which arises due to excess moisture content. Washing can affect textures and taste of the food too.

The features of equity shares are as follow : 

Primary Risk Bearers : The equity- shareholders are the primary risk bearers of the company. In case the company suffers losses then equity- shareholders have to bear the loss. The due payment is given to creditors before paying the equity shareholders.

Claim over Residual Income : The equity shareholders have claim over the leftover income of the company only. They get share in the income left after satisfying the claims of all creditors, outsiders and preference shareholders.

Basis for Loans : Equity share capital is the basis on which loans can be raised. The amount of equity share capital adds to the credibility- of the company. The amount of equity share capital increases the confidence of the creditors.

Control : Equity shareholders have control over the activities of the company-. The equity shareholders have voting rights. The equity shareholders cast vote to select the Board of Directors w ho control and manage the affairs of the company.

Training and development are two different processes but inter-linked with each other. Training is a short-term process consisting of an event but development indicates the gradual and long¬term process relevant to the growth of personality and maturity regarding their potential capabilities. The scope of training is limited to specific job, development serves the purpose of general knowledge and covers large area. Generally, the characteristics such as to improve the productivity, quality of service organizational climate, health and safety are included in training purposes. The extension in capabilities, job performance and personal growth with the passage of time are the main objectives of development.

Advantages of Centralized Mailing Department 

Cost Saving: A centralized mailing department saves costs. Instead of having a mailing seat in each department, a single centralized mailing department can save a lot of staff costs. It results in saving of clerical labour in the various departments. Departmental clerks and stenographers, being relieved of the mail handling work, can perform their departmental work better. 

Proper Record: Proper record of letters received and dispatched is maintained in a single department. 

Duplication and Errors : Mail-handling operation can be systematized which reduces duplication and errors, thereby effecting saving in time and cost. 

Responsibility of Workers: Responsibility for performing the different routine operations can be entrusted to different workers who have special aptitude for such work. This ensures accurate and speedy performance of work. 

Careful Handling of Letters: Prompt and careful opening of inwards mail,careful scrutinizing of the envelopes and their enclosures, accurate stamping of date and time of receipt and prompt distribution of mail to proper departments and persons is ensured. Similarly, careful folding and insertion into envelops of outwards mail, proper sealing and stamping of the envelopes, accurate recording in Post Book and prompt dispatch or delivery of the mail is also ensured.

Short term sources for a Joint Stock company are : 

• Public Deposits 

• Trade Credits 

• Customer Advances 

• Factoring

Debentures are common securities issued under borrowed fund capital. Debentures are instruments for raising long-term debt capital. Debentures are called creditor ship securities because debenture holders are called creditors of a company.

A debenture can be defined as ‘a document or a certificate” issued by a company under its seal as an acknowledgement of its debt. Holder of debenture certificate is called debenture holder. 

Following are disadvantages of Debenture :

Fixed Obligation: Payment of interest is a fixed commitment of the organisation whether it is earning profit or not. Sometimes companies have to borrow fund for payment of interest to debenture holders.

Reduction in Credibility : Financial institutions and lenders hesitate to lend funds in the companies having more of debentures. The credit-worthiness of a company which has issued a large number of debentures is low.

Charge on Assets : Usually debentures are issued against securities of fixed assets. During the time of depression, if a company is unable to pay the regular amount of interest and finds it difficult to repay the amount, in this situation the debenture holders can have claim over the assets of the company.

No Voting Rights: The debenture holders are not allowed to vote in the management of the company. All the decisions regarding interest rate for debentures are taken by the equity shareholders only. Therefore, they remain at the mercy of equity shareholders.