May 19, 2014
Posted by Karachi Board Notes
Export
1st Year POC - Principles of Commerce Notes
Export
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Discuss the Procedure of Export
The procedure of export trade is as follows:
1. RECEIVING THE ORDER
The first stage in the export trade is the receipt of an order from a
foreign merchant. the order directs the exporter to forward certain
goods. The order should give the necessary instructions, such as marks,
number, mode of forwarding, insurance, quantity, quality, size etc and
also the prices which the importer is ready to pay for the commodities.
2. EXPORT LICENSE
It is required to be taken by the exporter from the Chief Controller of
exports and imports. Export license is a permission from the government
for the export of certain goods. The export license helps the government
in regulating and controlling the exports of a country.
3. WRITING TO THE IMPORTER FOR THE LETTER OF CREDIT
Before the exporter arranges for the shipment of goods, he asks the
importer to open L/C in his favour with the bank. L/C is a security
given by the issuing banker that the exporter will be paid for the goods
exported by him. It authorizes the exporter to draw bills of exchange
on the banker for receiving payment and the bank permits their honour.
4. ASSEMBLING THE GOODS
When L/C has been opened, the exporter will proceed to collect the
goods. He will send the order to his warehouse for the goods for
packing. If the goods are not in stock, he will purchase them from the
local markets. The goods must be according to the order and all
conditions should be duty followed.
5.PACKING AND MARKING THE GOODS
Packing is an important part of the export procedure and should receive
due attention. Any instruction given by the importer bust be strictly
observed. The measurements should be marked on the outside. In some
cases gross weights are also indicated on the package.
6. APPOINTMENT OF A FORWARDING AGENT
The services of a forwarding agent can be taken for forwarding the
goods. The forwarding agents are paid a certain commission and they
undertake all the custom formalities on behalf of the exporter.
7. OBTAINING SHIPPING ORDERS
Shipping order is received from a shipping company by an application. In
the application, the full particulars of commodities with the port of
destination are given. The shipping company, carry the goods to the port
of destination at a certain shipping order.
8. CUSTOM FORMALITIES
In export trade the following custom formalities are undertaken:
A) SHIPPING BILL
The shipping bill is a form containing the detailed description of goods
such as marks, numbers, quantity, quality, country of destination and
the name of the ship. It is available from the custom office and is
filled up by the agent for paying the export duty. This form enables the
custom officials to calculate the amount of duty.
B) DOCK DUES FORM
It is available from the lending and shipping office. It is filled up by
the exporter or his agent by the payment because back authorities
render some services regarding the export of the commodity.
9. LOADING THE GOODS AND GETTING MATE RECEIPT
After paying custom duty and dock charges, the exporter makes
arrangement for loading them on the ship. The packages as they are
received on the ship are counted and their packing is carefully
examined. The captain at the ship then issues the receipt for the goods
received and this receipt is called a mate receipt. A mate receipt is
said to be claim, when it contains low, adverse remarks, regarding the
goods. It is said to be dirty when it contains certain remarks regarding
their defective packing.
10. BILL OF LADING
The exporter, after receiving the mate receipt presents it to the
shipping company and obtains in exchange a document called Bill of
Lading. The Bill of Lading can be transferred freely and it performs
three functions:
1. It is an official receipt of the goods, placed on board the ship.
2. It is a contract to carry goods to the port of destination.
3. Its holder is entitled to take delivery of goods by presenting it on the port of destination.
11. MARINE INSURANCE POLICY
Certain goods are required to be insured before they are dispatched to a
foreign country. Goods are insured with a marine insurance company and
the policy is sent by the exporter to the importer.
12. CERTIFICATE OF ORIGIN
This is the certificate which shows the origin of the commodities being
exported. That shows the origin of the country in which they were
manufactured. Due to special trade agreements between certain countries
goods sent from one country to another generally receives preferential
treatment in respect of the import duties. Certificate of origin is
obtained by the exporter for being sent to the importer, so that he must
be able to get advantage of preference in import duty.
13. PREPARATION OF INVOICE
The exporter having shipped and having gone through all the formalities
is now in a position to prepare the invoices. the invoice contains a
detailed description of the goods shipped and the charges incurred.
14. RECEIVING PAYMENTS
The exporter generally receives payments by drawing a bill of exchange
upon the bank where the importer has opened a letter of credit. He also
attaches with it the necessary documents such as Invoice, Bill of
Lading, Marine Insurance Policy, Certificate of Origin etc. When all
these documents are sent with the Bill of Exchange, it is called
documentary of Bill Exchange.
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May 19, 2014
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Marketing
1st Year POC - Principles of Commerce Notes
Marketing
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DEFINITION OF MARKETING
The term market and marketing are often very really used in ordinary
since but it has different meaning in commerce. marketing includes
business activities involved in the flow of goods and service from
production to consumption.
Mr. C.C Knight says: “ Marketing embraces all those efforts made in the
discovery of consumers actual and potential requirement for the
commodities and service and the steps taken fro securing their adequate
distributing”
According to Prof. Hall “ the word marketing describes number of
association activities which move towards a common objectives: the
determination of consumer demand for sale and distribution of goods and
services”
In simple words all those business activities which effect the transfer
of ownership of goods and services and provide for there physical
distribution come within the scope of marketing. Marketing activities
may be divided into two main groups;
1.those which effect the transfer of title of the goods 2. those which
are involved in the physical distribution of goods from one place to
another.
Market creates time, place and possession utility. It is for their
creation that study is becoming more and more important every day.
NATURE AND SCOPE
Marketing is a very comprehensive term and include all efforts to
1. discover the present and potential requirement of consumer.
2. the evolution of the product which would satisfy those requirements.
3. all the effective methods of production distribution
4. all the efforts to improve and modify the products.
FUNCTION OF MARKET
Marketing function can be defined as fundamental activities or services
carried out in the marketing process. These functions are performed by
manufactures, marketers, wholesalers etc. However the functions are as
follow.
BUYING:
Buying is an important marketing function for everyone connected with
the distribution and consumptions of good. Generally the wholesaler buy
from the manufactures, the retailers from the wholesalers and consumer
from the retailers. The performance of this function involves the
activities relating to determination of needs, selection of proper
source of supply, date of shipment etc. the function also considers the
quality of goods with prospects of high profit.
Selling:
The second important function is to arrange for the sale of goods.
Selling involves a a wide Varity of task. These include the discovery of
customers, introducing them with the available goods and encouraging
them to purchase them to purchase goods. Selling add possession utility
to commodities. Sometimes selling is a specialized function as in case
of brokers auctioneers and other sales agent who don’t handle the goods
at all but merely serves as a connection link between buyer and sellers.
Advertising:
The age of competition compels the seller to be alert in the creation of
demands for their goods through auxiliaries like advertisement and
salesmanship. The main objective is to draw attention of a large number
of people to the products and to convince them of the excellence of the
product. As a result the number of consumers increases. Without
publicity the goods may not be noticed and marketing may come to stand
still.
Transportation:
It creates place utility. In order to have goods must be transported
from one place to another. To a very great extent the marketing system
is built up upon economical and effective transportation. For the
distribution of goods over a wide area, effective transportation must be
available. and it should be adequate to meet the normal demands.
Therefore, the efficiency of marketing depends upon quick and cheap
means of transportation. With the increase in the distance between the
producer and consumer the importance of transportation has further been
increased.
Storage and warehouses:
Storage of good is an another important function of marketing. In many
lines of business goods are produced considerably in advance of their
consumption. Storing creates the utility. Because marketers often
maintain extensive inventories, the consumers desire to buy is satisfied
without waiting.
Standardization and grading:
It determines the form and classifies goods according to their quality.
The producer standardize his goods according to the requirement of the
market. It saves the time of consumers in selecting the goods. Consumer
relay upon manufacturers that their goods are of uniform quality and of
standard measure and size.
By grading we mean that actual sorting out the commodities according to
established specification relating to size , quality , color , weight
etc. Graded products facilitate buying and selling and the elements of
risk is also reduced .
Financing:
It consist of the supply and management of money of money and credit. A
considerable amount of time elapse between the production and the sale
of good, during that period finance is required at every step. The whole
marketing mechanism is based upon financing. The retailers demand
credit from the wholesalers , the wholesalers from the producers and the
producers from the banks and finance companies.
Risk taking:
The mere act of owning goods carries with it the burden of assuming
certain risks in connection with them. Some of the risks involved relate
to physical deterioration theft, damage , waste, change in demand or
supply or price. It is possible to minimize some of these risk through
shifting them to insurance company.
Packing:
Protecting goods from breakage, spoilage and leakage while they are
being transported or stored is another important function of marketing
process. Considerable efforts and research has been carried out in this
fields as packing represents a vital and expensive activity.
Branding:
It is applicable to all identifying marks by which a manufacturer or
wholesaler identifies his products. The brand enable the purchaser to
know what he is buying.
Recording:
A considerable amount of recording is recording in order to know who
made the purchase, the amount of investors. Therefore it is an important
function.
Sampling:
In order to show goods to distant customers the producer has to adopt
the prospect of sampling of the goods. It denoted the selection of apart
of commodity from a bulk in such a way that it would be representative
enough to render a correct idea about the commodity ti recipient of the
sample.
Having Market Information:
It is important function and it is extremely helpful to both the
consumer and the manufacturer. As markets for various articles are
widening the importance of research and information in increasing.
Producers are made aware of coming trends because marketers inform them
of changes in consumers want supply and demand and the new market
development, position of the computtors etc.
Salesmanship:
The chief objective of this stage of marketing process is to bring a
potential buyer into contact with the seller. Thus this is also an
important marketing function.
Marketing 1st Year POC - Principles of Commerce Notes Marketing karachiboardnotes.blogspot.com DEFINITION OF MARKETING The term market and...
May 19, 2014
Posted by Karachi Board Notes
Retail Trade
1st Year POC - Principles of Commerce Notes
Retail Trade
INTRODUCTION
It fulfills the requirements of the final consumer by placing the
goods at his disposal for final consumption. it is the link between the
wholesaler and final consumers. The retailers provide an opportunity of
choices to final consumers amongst the variety of product kept by the
retailer. He can also buy the goods in small quantities nearest to his
door in accordance with his requirements
FUNCTION OF RETAILERS
1. the retailers supply goods at the very door of consumers. The
consumer need not to go far to purchase the good because retailers are
situated at very little distance. He may bring the goods with himself or
he may leave them with the retailers to be delivered at his place as
soon as possible.
2. the greatest advantage of retailer is the stored goods and sell them
in small quantities when the consumer requires. He thus relieves the
consumers from the necessity of storing goods which may of them cannot
do for the lack of resources.
3. he tries to study the taste of the consumers and keeps the goods
likely be in demand. He again keep wholesale merchants in touch with
changing fashion and tastes and thus enables those goods to be produced
which are really in demand.
4. he keeps the large variety of goods manufactured by different
manufacturer with a view to enable his consumer good choice and
selection.
5. if the customer is dissatisfied by the good the retailers quite willingly makes good the complain.
6. he adopts diverse methods for reaching the customers. His beautiful
display and scientific advertisement are very educative.
SMALL SCALE RETAILING
1. HOUSE TO HOUSE RETAILERS:
They are those who wander house to house selling their goods. Hawker
and peddlers go into street, and different parts of the city in an
effect to sell their goods. These person requires little capital and
need no shop.
2. PART-TIME RETAILERS:
They are not regular retailers. They only sell goods from door to door
in their spare time. they sometimes deal only in the seasonal goods and
as soon as the season is over they stop selling the goods.
3. ORDINARY SHOPKEEPERS:
A large volume of retail trade is conducted by ordinary shopkeepers.
They may be divided into small and big according to their scale of
operations. Small shopkeepers require little capital and are
established in lanes , unimportant streets. Big shopkeepers commands
considerable capital and make shop in the most frequent areas in the
heart of the city. Shop may be general or specialized. A general shop is
the one where numerous varieties of goods of every day use are sold. A
specialized shop on the other hand, is specialized in the sale of
certain articles only for example fountain pens, jewelers shop.
LARGE SCALE RETAILING
Now days, as the production of goods is done on large scale , the flow
of good in the market is huge and varied. The distribution is also to
be done on large scale. The flow of good in market is huge and varied.
The distribution is also on large scale so as to reap the higher
profits avoiding competition from small organization. When retailers
purchase goods on large scale they save much as they can get many
advantages from the wholesalers and manufacturers. Beside they can
accumulate variety of commodities and thus attract the buyers. The large
scale retailers are discussed as follows;
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1. DEPARTMENTAL STORES
Such stores requires investment of huge capital and involves
considerable risk. The special features of this store is that they try
to sell almost every considerable commodity of commerce, almost from an
apple to an airplane. The store is divided into number of departments ,
suitated into the same roof, each department specializing in
commodities of the nature. That is why it is known as the departmental
store. it is thus an combination of large number of specialized shops,
under unitary control. An attempt is thus made to supply to the
customer all that he requires from this very place so that he may not
require to visit any other shop.
ADVANTAGES
The advantages of running a departmental stores are as follow;
1. The central side of departmental store gives it more advantages over a small scale retail store.
2. It provides efficient service to the customers like saving of time, car parking, telephone etc.
3. Such stores often create a demand for a commodity. A customer is
sometimes induced to purchase other things also when finds them nicely
placed in various section of store.
4. The price in departmental stores are less than in retailers shops because of the economy of large scale buying.
5. One department advertises for the other department.
DISADVANTAGES
1. The elaborated service provided by the store tends to increase overhead expenses.
2. The location of such stores ia sway from population residential
areas. It is difficult for the large scale retailers enterprises ie
departmental store to take away the share of profit of the small
retailers because they are located in central parts of the city and the
people living in the suburbs and the other parts may not be served.
2. MULTIPLE SHOP/ CHAIN STORE
Sometimes the manufacturer himself wants to eliminate all the
intermediateries and reach consumers directly. This he does by opening
multiple shops. Shops are opened in various parts of big cities and in
all important cities in province or country. These shops are mean to
sell only those goods in which the producer or manufacturer is
interested. The range of commodities kept and sold is thus very narrow.
The advantages accruing as a result of specialization are those of
economy in buying together with speedy and larger turn over at lower
price eg BATA shoe manufacturing company whose multiple shops are spread
all over the big cities of Pakistan.
ADVANTAGES
The multiple shop system enjoys all the advantages which normally
accrue to large scale enterprise namely , economies of buying in larger
quantities, centralized and highly sufficient control and experts
advertising of firm’s special lines. In addition to these there are the
following advantages particular to multiple shops;
1. Shortages of stock at any branch may be made up by transfer from one branch to another.
2. A speedy turnover of stock is attain and be accentuated by studying
sales figures to discover which of the goods are slow moving and then
concentrating advertising effort on these items only.
3. As a result of speedy turnover, multiple shops are able to run their business at slightly lower cost than the other types.
4. As sales are made on cash basis , there are no bad debts and no expense of maintaining a large clerical staff.
5. The multiple stop benefits also from the fact that numerous branches
can cater easily and efficiently for customers at comparatively short
distance from their residence. The total number of its customers is
larger than that of a single store or departmental store.
6. Each branch in itself is an advertisement for other branches and so
long as the goods sold are of good quality in relation to the price,
there is no limit to the number of branches that an efficient concern
my control
LIMITATION
Multiple shops suffer two limitation. Firstly they have to meet heavy
expenses. Much of the difference between their buying and selling
prices is absorbed by high rents of big promises in busy streets, with
rules proportionately higher and by provision for writing off the
initial cost of new shop fronts and new equipment and by the maintenance
of poorly paying branches in places where the trade is not enough.
Secondly many managers and staff do not, without constant supervision,
take the same interest in their duties as the proprietors would be.
3. MAIL ORDER BUSINESS
In mail order business goods are sold and delivered through the post and
not across the counter. From buyers point of view, it may be describe
as shopping by post. Payment is made by several methods, varying with
the type of stores and customers standing. If the customer has an
account, the goods are charged against it. If he is unknown the goods
are supplied either on “ cash with order” basis or the goods are sent
through the post office on cash on delivery basis. In later case the
VPP( value payable post) system is utilized.
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ADVANTAGES
1. Expenses and expensive shop, fronts etc. Are eliminated.
2. The sales in direct touch with the buyers and therefore it is generally to know the demands of customers more easily.
3. Advertising may be more effectively carried out since the results may be checked up with fair accuracy.
4. The actual selling is reduced to routine the work being performed by low grade workers and hence cheaper labour.
The sales appeal may be designed by experts and is not dependent upon
the capacity of individual salesman. The customer buys sitting at his
home and therefore saves himself from botherations of different types.
DISADVANTAGES
1. The small retailer is still able to compete with mail order house in
most lines and ho has “convincing appeal” in his varied shook.
2. All retail shops have the advantage of enabling customer to see and
examine goods but mail order business may not provide the facility to
their customer’s ordinal.
3. Heavy expenses on advertising increase the cost to the customer as compared with normal retailers.
4. Publicity through advertisement also include quality of goods; the
wordings of advertisement often create confusion and also sometimes
mislead the customer.
5. The sales appeal is stereotyped and may not be easily altered.
6. It is not easy to find causes of failure to affect sales nor is it easy to get the orders.
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May 19, 2014
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Wholesale Trade
1st Year POC - Principles of Commerce Notes
Wholesale Trade
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DEFINITION
Generally speaking trade may be carried on either on retail or
wholesales basis. When the goods are purchase in a large quantity by a
person to be sold in smaller quantities to retailers it is known as
wholesale trade. It may be defined as follow.
“ A wholesale transaction is one in which the purchaser dose no buy for
his own private or personnel use but is guided by a profit or business
motive ib the making of purchase.”
The wholesaler has following characteristics:
1. He deals in a larger quantity of goods which are being purchased from the manufacturer.
2. His business is specialized
3. He sells goods to retailers.
Thus the wholesalers are said to be marketing institution who buy goods
and then resell them. They are neither the manufacturers themselves nor
the retailers but acts as a link between them.
SERVICE OF WHOLESALER TO MANUFACTURERS:
The wholesaler render very valuable and important services to the manufacturer which are as follow.
1. By buying in large quantities the wholesaler enables the manufacturer
to benefit from the economies of lager scale production. So the
wholesaler grants financial assistance to producers.
2. A manufacturer is not expected to be expert seller. He is an expert
technician and must pay all hs attention to production. The wholesaler
enables him to do this by taking upon his shoulder the responsibilities
of distribution.
3. The wholesaler relieves the manufacturer of the necessity for
carrying larger stock . thus enabling him either to release his capital
for future production or to carry on the business with less capital then
would otherwise be necessary.
4. The wholesaler direct the manufacturer as regards the quality and
quantity of the goods demanded, new market developments ,coming trends
etc as they are in direct contact with the retailer who know the market
conditions.
5. The wholesalers often enable the manufacturers to minimize his total
distribution cost eg. The manufacturer of consumer goods would behave to
establish and maintain an enouomus sales force in order to reach all
outlets in which he would like his product stocked.
6. The manufacturers are already short of funds and cannot afford to
allow credit to retailers, however the wholesalers can do so and relieve
the manufacturers from credit burden.
7. The wholesalers simplifies the marketing process and makes fewer
transactions necessary. A manufacturer deals only with a selected number
of wholesalers rather than hundreds and thousand of retailers.
SERVICE OF WHOLESALERS TO RETAILERS
The wholesalers render very useful services to retailers which are as;
1. Supplying goods according to the demand: the retailers due to smaller
capital cannot hold a big stock of any commodity but he the wholesaler
by holding large stock of different varieties of goods enables the
retailers to make purchase in small quantities at interval and to carry
on business with less capital.
2. Facilitating choice of selection: a wholesaler hold large stocks of
different varieties of goods and thus enables the retailers to exercise
there choice and selection.
3.Credit facility: most wholesaler grant credit. This reduces the
capital requirements of the retailers and enable him to maintain huge
stocks of goods.
4. The stocks held by wholesalers enable the retailer to obtain supplies more quickly than they can from manufacturer.
5. The wholesaler makes the retailers buying function easier as he needs
to deal only with a small number of wholesalers, rather than hundreds
of manufacturers.
6. He often enable a retailer to reduce his total buying cost . they are often able to take advantages of volume discounts.
7. He regulates the price by controlling the supply and thus minimize the risk of retailers.
8. Since they perform a storage service, therefore they absorb a part of
retailers storage burden. If the retailers were to buy direct from the
manufacturer they would have to store the goods themselves.
9. They provide suggestion to retailers in connection with the store
display, selling technique, and maintenance of accounts etc.
10. The supply of goods in small quantity enables the retailers in avoiding wastage.
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Finance
1st Year POC - Principles of Commerce Notes
Finance
karachiboardnotes.blogspot.com
Introduction
It is necessary for a businessman to plan financial aspect in the early
stage of starting any new business and it should not be left to chance.
From the starting and to any later expansion in the firm’s business,
finance plays a very important role in purchasing aspects and to meet
the expenses if necessary for carrying on the business affairs. The
financial needs of business are assessed by the size and the nature of
work. For a large business, financial needs are high as compared to a
small business. For example, the joint stock companies require large
amount of funds whereas sole proprietorship and the partnership business
require small amount of funds. Finance can be obtained through two
major resources owners’ capital and borrowed money. The requirements of
funds depend upon utilization that is how much funds will be needed for
circulating and fixed capital. The capital credit obtained from any
financial institution is known as borrowed money. Funds which are
required to purchase any asset and to meet the expenses from the initial
stages to the extension of any business is known as finance.
Kinds of Finance
Long Term Finance
Long term finance is that part of capital which is required by a
business enterprise to finance its blocked or fixed assets such as land
buildings, machinery and other appliances of permanent nature. In the
established undertakings, it is required for extending the scale
production and for the renewal and replacement of the fixed assets, or
for taking the advantages of new discoveries. Thus, it is needed for
considerable period of time, usually for 10 or more years and hence it
involves a high cost due to higher amount of interest.
SOURCES OF LONG TERM FINANCE:
The following are the various sources of obtaining long term finance.
1. SHARES:
The initial capital is obtained by a new concern by floating shares.
Shares represent equal portion into which the capital of a company is
divided. Shares may be issued directly by the company or through the
under writers. Selling of shares is the most important method of
securing fixed capital and the contributors are the general public.
2. BONDS AND DEBENTURES:
To raise sufficient capital and to draw the attraction of those people
who don’t find interest in investment, debentures are issued b y a
company. Debenture is a promissory note for the repayment of money
borrowed and the payment of interest at fixed rates. The contributor is
again the general public.
3. GOVERNMENT LOANS:
The state aid in the form of guarantee of dividend of new companies,
taking of securities, plays a definite role in the financing of
industries. In our country, industrial-finance Corporation was
established to give long term loans.
4. FINANCING INSTITUTIONS:
In Pakistan there are the following institutions from which different industries can take their finance for long periods:
A- PICIC:
This corporation aims at stimulating promotion of new industries, the
expansion of the existing ones and the furnishing of the technical
know-how as to increase production.
B- IDBP:
This bank was setup to provide credit and other facilities for the
development of industries. Other institutions are NDFC, BEL, investment
trusts, insurance companies and commercial banks.
5. PUBLIC DEPOSITS:
An enterprise can raise finance by the acceptance of deposits from the
public directly for fixed terms and at fixed rate of interest. This
method is however, dangerous and has declined in importance in recent
years.
6. PLOUGHING BANK OF EARNINGS:
This is very easy method of financing and is available to only
Established enterprises.re-investment of a part of the profits is an
ideal means of financing, expansion and improvements.
Short Term Finance
A common problem of every business is financing day –to –day operations.
Normally business finances these items out of the receipts from sales,
but some times the firms financing is needed. It is required for pour
hasting raw materials, additional inventory etc. for meeting purposes’
.it is required for short period ,generally foe one year .it is needs
because of the fact that the stock is to kept ready before it is
actually consumed.
Sources of Short Term Finance
The main sources of obtaining short–term loans are as following:
1. Commercial Banks
Finances are acquired from banks by means of loans, discounts overdrafts
etc. they provide short term finance in the shape of discounting bills,
granting loans and accepting bills on behalf of their customers.
2. Commercial Credit Houses
These institutions provide short term finance against mortgage of property or promissory notes.
3.Proprietor‘s Personals Funds
This is an important source of financing a small business. The
proprietors themselves supply the capital of the business from their own
pockets. But in large scale undertakings, this source is insufficient.
4. Borrowings from Friends and Relatives
Sometimes business is also finance by taking loans from friends and
relatives. Finance from this source is very limited and uncertain.
5. Public Deposits
Some units accept deposits from the public from short period on
attractive rates of interest and utilize the funds for their currents
financial requirements.
6. Indigenous Bankers
There are large number of money lenders i.e. Mahajan, Sahukar, Shroff in
the country who provide considerable sums for the business, though at a
high rate of interest.
7. Land Mortgagment
The financial institutions give loans on short–terms to he business man or industrialists on the security of land and bearable.
Foreign Exchange Banks
These banks also provide short term funds. They mainly provide finance to the foreign business undertaking of their nationality.
9. Unsecured Loans
This type of financing includes:
A) Promissory Notes:
They are the legal instruments used in advancing banks loans. It is the major source of the short–term finance.
b) Commercial Drafts:
A draft is an instruments made by one person ordering the second person
to pay a sun of money to a specified individual on sight or at a future
date. Secured loans: There are times when short term financing may be
accompanied by collaterals, which gives the lender the right to seize
certain property if the borrower does not replay the loan.
10. Secured Loans
There are times when short term financing may be accompanied by
collaterals, which gives the lender the right to seize certain property
if the borrower does not repay the load.
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Indexing
1st Year POC - Principles of Commerce Notes
Indexing
karachiboardnotes.blogspot.com
Introduction:
Index is simply a list arranged alphabetically showing the required
reference. An index to file may be set out in the form of a bound or
loose leaf book whereas a separate page or group of pages is allotted to
every letter of the alphabet, the field no. being entered against each
name. Thus indexing is a system through which the location of the
records may be found easily. It may be placed near to the records or may
be kept apart from the records or the records themselves may be so
arranged as to be self indexing eg . 1 index of a book (apart from the
records) and 2. Telephone directory (self- indexing).
Indexing Equipment
VERTICAL CARD INDEX:
There are number of card in it and each card deals with one item of the
index. On the top edge of the card, reference heading is written. On the
remaining part of the card, the location of the item is written, where
the self- indexing system is in use, the remaining part of the card
contains the record itself. These cards are arranged vertically in a
drawer or tray in such a way that they can be used very conveniently for
reference to make the function or finding the reference more easily,
tabbed guide cards may be inserted at required intervals.
STRIP INDEX:
It is consisted of frame into which strips of shout paper or card can be
fitted in any required order and subsequently withdrawn and rearranged
whenever changes are to be made. Each strip is devoted on one item of
not more than two or three lines. Frames can be made up in various forms
to suit different purposes; they can be fixed to the wall made up in
book form or where a large number is necessary arranged on a rotary
stand which is easily turned to give reference to any desired portion of
the index.
VISIBLE CARD INDEX:
This is an index which offers the ready visibility of the strip index
and also the additional record space provided by the vertical card
index. It consists of series of cards, arranged so as to overlap leaving
a strip of each card exposed. This exposed edge is used for the
reference heading, the remaining part of the card is readily available
for record purpose. The trays in which these cards are kept are fitted
with devices which enable the cards to be held in position and yet
permit individual cards to be written upon withdrawn replaced or
rearranged as may bar required. The trays of cards are usually kept in
cabinet but as in the case of the strip index frames can be arranged in
book form when they make an easily portable record.
VISIBLE BOOKS:
Overlapping visible index records can also be kept in book form. A
viable book consist of a loose leaf binder in which paper pages are
arranged in a similar formation the cards in visible card index.
WHEEL INDEX:
This is a form of vertical card index in which the cards are arranged
about the circumference of wheel set in a cabinet or desk. Thousand of
such cards can be attached to one wheel and as many as six wheels set up
within the reach of one clerk seated at his desk.
STAGGED CARD INDEX:
This is an arrangement of the vertical card index which has been
developed to give easier reference to headings. Cards are arranged in
groups and overlapped so that the reference headings on the cutaway
concern of a whole group can be seen at once. This system of indexing is
sometimes applied to ledger cards to facilitate the extraction of
accounts for posting.
SLOTTE CARDS:
The cards are punched with holes along one or more edge, each hole
represents a classification or figure in code number. Written
information is recorded by hand or typewriting in the centre of the
card. The information in term of which it is required to deselected or
sort can be recorded along the edge of card by cutting the appropriate
holes into slots. Once they have been prepared the card may be filed in
trays in any order. To select the card for a particular classification
batch of several hundred cards is removed from the tray and a long
needle is passed through the holes representing the class required. When
the needle is lifted the cards which have been slotted at these holes
fall out so separate themselves from the remainder.
Indexing 1st Year POC - Principles of Commerce Notes Indexing karachiboardnotes.blogspot.com Introduction: Index is simply a list arranged...
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Posted by Karachi Board Notes
Filing
1st Year POC - Principles of Commerce Notes
Filing
karachiboardnotes.blogspot.com
Introduction
A system of arranging o r preserving documents received and copies of
letters issued in a proper way is known as filing system. Such a
preservation of all the letters and documents enables the businessman to
have ready reference as and when needed. Business concerned, big or
small, carry correspondence wit a number of customers or clients. Such
correspondence forms a permanents record of what has happened between
the businessman and the customer. Reference of the previous
correspondence is to be made for carrying any business activity and also
forming new policies to make a business a successful one. There fore a
copy of incoming and outgoing letters is to be preserved and arranged in
a systematic way so that they may be easily available with out any lose
of time. This whole process is known as Filling.
Essentials of A Good Filing System
For an efficient filling system it is necessary to have the following qualities:
1. Simplicity
The filling system should be quite easy and simple so that every one in
the office and use it with out any technical knowledge. It would be so
simple that even an inexperienced employee can use it.
2.Safety
The preservation of the letters is the foremost object of filling
system. The letter should be kept in a lock or other device to prevent
unauthorized persons to approach the correspondence
3. Elasticity
With the development of business some times it becomes necessary to
alter the filling system. Therefore it is essential that filling system
should be elastic
4.Minimum space
The space occupied by a filling system should be as small as possible
5.Cheapness and Economy
To avoid any financial pressure the system of filling should be cheap and economical in proportion to the size of business.
6.Rapidity of Reference
Filling of letters should be easy in order to trace the required letter with out any loss of time
7.Suitability
Again the system of filling must suit the requirements of the business
in connection with which it is used.The requirements of each business
house vary according to the nature and extent of its business and the
actual system of filling best suited to it varies accordingly.
8.Rapidity of Filling
The system should be such that the papers could be filled rapidly with out any loss o time
9.Accessibility
The records should be kept in a place and in a manner easily accessible
to all. otherwise there is bound to be a waste of time in making
references.
Various Systems of Filling Letters
I. Wire Filling
2. Pigeon Hole Filling System
3. Flat or Horizontal Filling System
4. Vertical or Upright Filling System
I. Wire Filling
In this system of filling a hard and thick steel wire is used. The wire
is fixed on a small round wooden base and has a sharp point. in this
thick wire all the letters are pushed and the wire is hung. it is
usually used in small business houses.
II.Pigeon Hole Filling System
This system requires a wooden almirah containing 24 compartments like
pigeon holes. There is usually a shutter in the front of the almirah to
protect the letters. each compartment is labeled with one letter of
alphabet. the last compartment bears the label of X,Y and Z. this is
very old system of filling letters.
III. Flat or Horizontal Filling System
In this system in an iron almirah, the card board files are flatly, or
horizontally kept in a number of holes duly alpha bated . this is a very
popular and scientific system of filling letters. this system is a
great advancement over pigeon hole system. It is known as flat filling
system because of the fact that the letters filled under it are kept in a
flat position files are specially designed for use in this system and
their different makes are available in the market. The available files
can be grouped into the following classes
1.The Cardboard File
It is a primitive form of filling. under this system either the
cardboard covers or drawers of specially made cabinets are used, as
files .the letters are put upon the cardboard and fastened with the help
of a clip.
2.The Box File
This is also not in much use. Here wooden boxes are used as files .the
letters are kept flat inside the box in an alphabetic or numerical
order. It is used in very small business houses .
3.The Arch Files
This is the most popular form of flat files. A businessman generally
keeps a number of flat files according to the volume of correspondence
and the system and the system of classification he adopts. If the volume
is small , one file may be sufficient ,but if it is large one file may
be used for containing the correspondence of a single individual and
there will be as many files as correspondents . the letters are arranged
date wise. these files may be kept just like books or hung on the
walls, or they may be kept in shape of drawers fitted in a cabinet.
4.The Shannon Files
The Shannon file is the best known system of flat filling .this form
consists of a filling cabinet containing many compartments in accordance
with the requirements of the business .each drawers contains index
sheets below which the letters are filled.
SPECIAL FEATURES OF A HORIZONTAL FILLING SYSTEM
Whatever the make of the flat files, they possess the following special features which should be carefully noted
1. The files keep the letters in a flat position and contain a device for fastening the letter s
2. Each file consist of alphabetical index cards which are made of loose stiff sheets .
3. The letter are placed date wise, with the latest letter date on the top.
4 All the letters contained in the file are carefully fattened together.
5 The file may be hang on the wall , or kept in the shape of the drawer in a cabinet or made to stand like a book.
6 When a file is full , the letter are removed to be transferred in binding cases.
ADVANTAGES OF HORIZONTAL FILLING SYSTEM:
1 The letter filed cannot get out of order or cannot be misplaced or lost as they are fixed on the arches.
2 If at any time , the letter of a particular correspondent is to be
removed , it can be done without disturbing the order of other letters.
3 A file drawer may be dropped accidently, but there is no fear of mixing the letters.
DISADVANTAGES OF A HORIZONTAL FILLING SYSTEM :
1 Since the letters are fastened together , inconvenience is felt filling or taking out a letter.
2 The relative slowness is getting access to the letters as they have to
be re-shuffled and turned forward and backward to find the required
letter is inconvenient.
3 It is absolutely necessary to punch the papers , which makes the system time consuming.
4 Trouble is involved in re –organizing the cabinet to maintain an increasing volume of correspondence.
IV. VERTICAL OR UPRIGHT FILLING SYSTEM
A still further advancement the art of filling letters is the vertical
filling system . It is the most leading method of filling suited to a
large concern having innumerable correspondence . The system is called
vertical because the letters are kept in a vertical position . It
requires a cabinet with deep drawers , folders and guide cards . In this
system the letters remain unfastened.
WORKING OF THE VERTICAL SYSTEM:
The following are the things which are needed for the proper maintenance of the vertical filling system.
1.FILLING CABINET:
This cabinet contains drawers which are made of wood or steel . The
requirement of drawer depends upon the volume of correspondence and
nature of the business. Cabinets with locks also provide safety.
2. FOLDER:
A folder is made of strong paper and is folded in the middle so that the
letters can be easily arranged in it. They are usually placed date
wise. On the projection edge of the folder is written the
correspondent’s name, subject etc.
3. GUIDE CARDS:
Small groups are made in each drawer by sheets having in a tab. These
tabs are marked alphabetically, geographically or numerically. The
folder are kept behind them according to the mark on the tab.
4. ARRANGEMENT OF THE FOLDERS IN THE DRAWERS:
The folders containing the correspondence are arranged in the drawers
either alphabetically, geographically or numerically. The most common is
the numerical arrangement , but sometimes alphabetical arrangement is
also preferred thus they may be arranged in the following order:-
a. NUMERICAL ARRANGEMENT:
Each folder is giving a certain number which is put down on the raised
portion of its back. If a folder holds the letter of the single
correspondents then all the papers will also carry the same number as
that of the folder. If a folder contains documents related to more than
one correspondents then the decimal system will be applied e.g if the
folder carries a no. 53 then the correspondents will be numbered as
53-1, 53-2 etc. folders are bearing numbers like 10, 20, 50 and so on
inserted in the proper places so that they indicate the position of the
various folder of different numbers.
b. ALPHABETICAL ARRANGEMENT:
In this folder contains the name of the correspondents on the raised
back portion and not the number. Each guide card indicate the initial
letters of the correspondents e.g. the letters to and from Mubarak Ali,
Mahmud Ahmed etc will be placed together and their position will be
indicate by the guide card bearing the letter ‘M’. The folders are
arranged one after the another according to the first vowel occurring in
the correspondents name. t he advantage of this system is that it does
not need a separate index but it posses the disadvantage of causing
conclusion between the customers bearing same names.
c. GEOGRAPHICAL ARRANGEMENT:
This is merely a variation of either the alphabetical or numerical
systems adopted geographically to meet the requirements of a particular
business. One may allot each drawer for correspondence in each province,
and guide cards may be put indicating each town. Traders having
flourishing foreign trade and big merchants usually adopt this
arrangements.
d. SUBJECT ARRANGEMENT:
Where the subjects are of more importance than the name of
correspondents it is useful to file all papers behind alphabetically
arranged subjects guides using tabbed folders for sub- divisions of the
subject or individual correspondents.
5. ABSENT OR OUT GUIDES: These are cards with ruled columns. When a
folder is removed for reference the filing clerk puts an out guide in
its place and enters in the ruled columns the particulars of the folder
removed.
ADVANTAGES OF THE VERTICAL FILING SYSTEM:
1. SPEED OF LOCATION: Speed of location is possible as the system
combines admirably with the visible system of indexing. They can be
traced out quickly without must effort.
2. CONVENIENCE AND CHEAPNESS: The vertical filing system has the
advantages of handling a large volume of correspondence more
conveniently and cheaply.
3. EASY REMOVAL OF DOCUMENTS: Access to the folders and to the documents
is simple and that is why the removal of documents is easy.
4. FLEXIBILITY: This system is more adaptable in increasing the correspondence.
5. TIME SAVER: The papers need not be punched under this system, therefore it is a time in this respect.
6. NO FEAR OF MIXING: Since the correspondence of one individual is
quite separate from others, therefore there is no fear of mixing up of
the correspondence.
DISADVANTAGES OF VERTICAL FILING SYSTEM:
1. DANGER OF LOSING: Since the letter are left lose in the vertical system therefore, there is danger of losing them.
2. INSECURITY: This system has no security and in case a letter is dropped, it upsets the whole order.
3. LARGE SPACE: This system requires a large space as compared to the flat files.
Filing 1st Year POC - Principles of Commerce Notes Filing karachiboardnotes.blogspot.com Introduction A system of arranging o r preserving d...
May 19, 2014
Posted by Karachi Board Notes
Inflow and Outflow of Paper
1st Year POC - Principles of Commerce Notes
Inflow and Outflow of Paper
karachiboardnotes.blogspot.com
Introduction
Correspondence is of great importance in modern times. Almost each
business transaction involves exchange of papers of different kinds and
other material, letters orders samples, cheques drafts, bills ,
government instruction through circulars and official letters invoices
and so on. It is therefore imperative that the correspondence department
must be vigilant and efficient in disposal off the letters and
maintaining the accurate and complete records of all the papers
concerning the commercial transactions.
The correspondence in commercials office had been divided into two categories.
1. Inflow or inward correspondence.
2. Outflow or outward correspondence. Inflow and outflow of papers are
guided by the individual requirements and environment or business
location and the type of business. They are discussed as below.
INFLOW OF PAPER
1. OPENING OF LETTER:
This letters are usually opened in the presence of the general manger of
some responsible officer who by quick glance over each letter
assertions whether it deals with matters of routine or required any
special notice to be taken. He is particularly watchful of letters which
contain a discordant note or complain. Care has to be taken to see that
the contents of the letters are properly emptied before the outside
covers are thrown away. If the letters is addressed by human name or is
marked privateer it is not opened but is handed over to the person
concerned. Remittances received are sent to the cashier for entry in
cash book. All the cheques received are crossed and endorsed before
being sent to the bank for collection and credit to account.
2. STAMPING AND SORTING THE LETTER:
The letters are then sorted out and marked with the date and time of
their receipt noted on each of them; this is done with a view to prevent
laziness and irresponsibility on the part of the staff in dealing with
the letters. They are then sorted out bin batched according to their
nature and each is handed over the person entrusted with the dealing
letters of that type. Sometimes each letters is impressed with an
identification mark indicating the department which it belongs to. The
officers are thus enabled to ensue that prompt action is taken on all
the letters by each department and filing is up to date and correct. The
letters may also then be numbered for quick reference in the office n,
if a numerical system of reference is maintained.
3. ENTRY IN LETTER RECEIVED BOOKS:
The letters received are briefly recorded in a let ter received book. It
records a date of receipt the name of the sender, and the subject of
the letter , the departments to which they have been handed over , the
manner of their disposal and the reference through which they have been
disposed off.
4. PREPARATION OF REPLIES:
The concern department then deals with the letters take any action
necessary upon them and draft replies which are forward to officers, for
correction and approval, along with the letter to which they are
replies. When the draft is approved the officer sends it to the typist
and also initials in the last column of the letters received book to
indicate that the letter has been dealt with. Officers my also dictate
letter to the typist who may take them down in shorthand and then final
letter to be dispatched.
OUTFLOW OF PAPER
It means all those letters invoices, documents etc which are being sent
from the office. The outflow paper includes the replies of the letters
received by the office as well as the original correspondence done by
the office. The outflow correspondence passes through the following
stages.
1. REPLY OF LETTER RECEIVED:
The outgoing letters must be prepared with promptness and accuracy and
they must be politely worded. They have been described as the silent
ambassadors of the business concerns and as such they must have an up to
date finish to capture the imagination of the reader. A typewritten
letter makes a better impression on the addresses than a hand written
letter, since the former is better to look and can be read more easily.
2. THE COPYING OF LETTERS:
It is very essential to have a copy of the letter sent on record for
future reference. In case of any dispute this copy would be quite
helpful in settling the same. The copy can be obtained by a carbon,
press copying machine and in many other ways.
3. THE DUPLICATING OF LETTERS:
The circular letters are to be sent to a large number of firms. In such
cases hundreds of copies of the same letter are needed. When these
copies are prepared by the help of a machine the same is known as
duplicating machines in use which help in the preparation of these
copies.
4. FILING OF LETTERS:
The letters received and the replies of the letters sent or a copy of
the original letter is to be then filed properly. The files are to be
arranged in a systematic manner so that the previous correspondence when
required may be found out quickly and easily.
5. DISPATCH OF LETTERS:
The work of sending the letters away from the office is given over to a
dispatch clerk. In sending away the letters, he must be very prompt and
must also look to the postal requirements in connection with letters
which are to be sent through the post office. Neat folding of letters,
seeing that the letters are properly addressed and accompanied by the
relative enclosures, and making sure that all letters are properly
signed by the officers concerned, are matters which the dispatch clerk
must look to. He is also required to send away all the telegrams from
the office.
6. ENTRY IN A POSTAGE BOOK:
A brief record of all the outflow of papers is kept in a postage book
which also serves the purpose of a letter outward book. The dispatch
clerk is usually given an advance which he uses to buy postage stamps of
various denominations. He uses the postage book to maintain an account
of the money advanced to him the postage stamps used by him in
dispatching letters.
7. USE OF PEON BOOK:
Some letters are to be sent to the local businessman. These letters are
not sent through post but through a peon duty entered in a peon book.
The dispatch clerk before sending letters will sort out all those
letters separately which are to be send to the local businessman. He
will then make entries of all such letters in the peon book and hand
over the same to the peon who will personally deliver these letters to
the addresses concerned and obtain their signatures to the peon book
maintains a complete record of all the letters sent locally.
Inflow and Outflow of Paper 1st Year POC - Principles of Commerce Notes Inflow and Outflow of Paper karachiboardnotes.blogspot.com Introduct...
May 19, 2014
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Labour Saving Devices
1st Year POC - Principles of Commerce Notes
Labour Saving Devices
karachiboardnotes.blogspot.com
INTRODUCTION
There was a time when business used to be small and the total number of
employees used to be quite a few. The office appliances were regarded
merely as luxury. With the expansion of business, there has been a great
development in the use of office appliances and labor saving devices,
which have been introduced to save time and manpower. These machines can
do the job more speedily, accurately and at lower cost. In fact, they
have become a necessity for smooth and efficient working of the office.
Labor saving devices can be classified into the following three groups:
A. General Machines
B. Communication Machines
C. Accounting Machines
A. GENERAL MACHINES
1. TYPEWRITER
It is a common machine and is used in each and every office, as time and
labor saving devices. Through this machine, many letters and documents
can be typed with speed and neatness. It can prepare more copies in no
time. As the industry advanced and requirements increased the
improvement in typewriting machines have also been made. Noiseless
typewriters are used where typists work near executives and other clerks
as noise is likely to cause disturbance. Electric power is also used
for operating typewriters. Electric machines require less human exercise
and can type more copies than the ordinary machines of typewriter. This
is more liked by a typist as he gets less tired and maintains his
output better than he does by an ordinary machine. Electric typewriters
are more expensive and cannot be used in small offices.
2. DICTATING MACHINES
There are a number of dictating machines but they are all based on same
principles on which the gramophone works. These machines record the
dictation given by the office executive who can be transcribed by the
audio typists and thus, the presence of stenographer is not necessary.
These machines however, usually consist of three machines the actual
dictating machine, the transcriber and the shaver. The first is used by
the person for dictating. The second on e is used by the typist an the
third machine is used fo9r shaving of the dictated matter. This machine
is most useful for secretaries, partners, managers and others who rare
subject to frequent interruption. With special attachment, the dictating
machine can be connected so as to record telephone, messages and by the
use of microphones, it can also be used for recording speeches.
3. DUPLICATORS
When 100 of copies are required the duplicating machines are used. Each
class of machine has its advantages and in selecting a machine for use
in particular office, these advantages should be be Given consideration.
A variety of duplicators are in use nowadays and few of them are given
below;
A) SPIRIT DUPLICATOR
These duplicators can reproduce typewriting, hand-writing or drawings in
a variety of colors. A master copy is prepared on a sheet or art paper
by means of hectograph carbon paper. This is the only type of machine
which can reproduce in several colors in one run. According to the
quality of paper and carbon paper used, 100 to 250 copies can be made.
B) STENCIL DUPLICATOR
These duplicators can reproduce type writing .the stencil is out either
on typewriting or by writing or drawing with a special pen. Up to 4,000
copies can be obtained and stencils can be stored and re –used if
carefully handled and protected.
C) OFF SET LITHO DUPLICATOR
These duplicators can re-produce typewriting, hand writing and drawing.
As in the case of stencil, different colors can be reproduced on the
finished copy. Up to 50,000 copies can be obtained from the machine.
D) TYPESET DUPLICATOR
These machines are in fact, small printing press of letter press type.
It is a sloe method and it also requires some skills to do job. Up to
500,000 copies may be printed.
4) ADDRESSING MACHINE
This machine is bit different from the duplicators .these machines are
generally used for addressing the envelope to the regular clients or for
the preparations of labels. These machines are adaptable enough to take
the wide variety of other work in the office .These machine are
operated by electric power.
In this machine, addresses are embossed on metal plates or are stenciled
on specially prepared fiber material. These plates are placed
alphabetically or in any other manner. When the actual addressing work
is t be done, these plate are placed and passed through the machine, and
the address are printed on the envelopes.
5) CASH HANDLING MACHINE
The work of the cash department can be helped considerably by machines
for handling coins. There are machine for sorting out coins of different
denominations from a mixed heap of coins and appliances are also
available for counting them. There are also machines for giving change
quickly. As no mental calculation is necessary, a great saving of time
is affected by such a machine where the number of transactions is very
large.
6) CASH CHECKING MACHINE
There are number of appliances which may be used to check automatically
the receipts of cashiers. They are usually known as cash registers. Some
of them also have arrangement for adding up the receipts so that at any
time the machine shows the total cash that should be in be the cash
drawer attached to the machine. Some are also so constructed as to issue
the receipts to customers while keeping the record for the office.
7) FRANKING AND STAMP FIXING MACHINE
Franking machine saves a good deal of time in scaling the letters and in
getting ready for the mail. This machine makes an impression on the
envelopes showing in red ink the amount of the postage and the place of
origin and date of posting. No postal stamps need to be used. The
machine have matters attached to them and they are locked and sealed by
the postal authorities to frank up the amount after which the machine
gets automatically locked. Some of these machines also have an automatic
envelope scaling device. Some business houses have the stamps affixing
machine which are fed with postage stamps, and there are devices to cut
the stamps off, to moisten and affix them and to count them.
8) TIME RECORDING MACHINE
These machine records the time of arrival and departure of the employees
of he office. These type of machine is used in the office where payment
are made on the basis of time spent on the job. This machine is like a
clock and when the employee enters the office he cuts card in the
machine which prints the time. Similarly when he goes out, further he
cuts the card in the machine and departure time is printed on the card.
B) COMMUNICATION DEVICES
1) TELEPHONE
The use of telephone is so common and all its importance is so well
known that it does not need further explanation. It is maintained by
high business houses internally and externally. Internal system enables
the executives of same organization to talk to each other on telephone
whenever they need so. External systems enables them to talk outside
parties. Every city is linked by telephone system so that through trunk
call any one may have talk anywhere in the country with the required
person.
2. RADIO-TELEPHONY
It is a system which link by telephone mobile vehicles in city or may be
in an area. This system is in advance countries. Under this system
mobile units such as cars, vans, etc can control each other on
radio-telephony through the central station located in the city.
3. PUBLIC ADDRESSING SYSTEMS
In big factories, shops and offices this system is a useful means to
give instructions to all of the employees or only those particularly
concerned with any special instruction. This system has an advantage of
quick communication of message to the concerned persons but it has also
the disadvantage of distributing all of the employees while instructions
are concerned with any particulars employee.
C. ACCOUNTING MACHINES
1. ADDING MACHINES
After typewriter, adding machine in perhaps the most commonly used
machine in office routine working. Adding machine is basis for all
further calculations. These machines are of two type: listing and
non-listing. These machines have following advantages:
1. Cross-casting is much further faster. Most clerks, unless they are
very highly skilled, cannot add horizontally with the same speed as they
can add vertically.
2. Selected items can be added from different documents or from scattered positions in one document.
3. Less skill and concentration are required by the clerk.
4. With the aid of adding machines, junior clerks can add with speed and accuracy equal to or exceeding that of a skilled clerk.
2. CALCULATING MACHINES
In a large business there is a lot of calculation work, in order to
asses the position. In calculation various forms such as addition,
subtraction, multiplication and division are involved. There is
likelihood of accounting mistakes, and takes more time in corrections.
Keeping in view both the important factors time as well as accuracy
nowadays the calculation work is carried on through calculation
machines. With the help of calculating machines addition, subtraction,
multiplication or division can easily be made with accuracy and without
loss of time. Apart form this with the help of said machine the problems
of exchange, discount etc. can be solved with great accuracy. It does
not require any special training to operate the machine, the mistakes
can only occur when the machine in question is not properly handled or
when out of order.
3. POSTING MACHINES
Posting means the transfer of amounts from original entries to the
appropriate ledger accounts. Accuracy of entries and easy to read are
the most important requirements of this function. These machines play an
important role in maintaining the accuracy.
4. ELECTRONIC COMPUTERS:
The computers operate at the fastest speed which ever is thinkable by
human mind, because these machines do not depend on mechanical movements
but on electronic pulses with duration of about one millionth of a
second. Computers are able to perform the following functions:-
1. Receive a programme of orders representing the routing to be carried out, store this and refer to it as may be required.
2. Take in original information through one or more input channels and store it for reference as required by the programme.
3. Perform any arithmetical calculation as and when required by the programme.
4. Store the result of any calculation for further reference and accumulate totals as required by the programme.
5. Select any information from the store, arrange it in any required
sequence and discharge it through one or more output channels to be
printed punched into cards or paper tape, or recorded on.
Apart from computer speed, the principal characteristic of electronic
computers is their flexibility as would appear from the following:-
1. They can be made to carry out any electrical operation only by feeding in the appropriate orders.
2. They can proceed from one kind of operation to another automatically.
3. They can automatically select alternative courses of action according
to the nature of the date received or the results of previous
operation.
Labour Saving Devices 1st Year POC - Principles of Commerce Notes Labour Saving Devices karachiboardnotes.blogspot.com INTRODUCTION There wa...
May 19, 2014
Posted by Karachi Board Notes
Importance of Advertising
1st Year POC - Principles of Commerce Notes
Importance of Advertising
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DEFINITION
“Advertising is an art of providing market information through the
various media of communication such as magazines, newspapers,
television, radio etc. at the expense of the company for the purpose of
increasing or maintaining effective demand and making easy the sale
specific goods and services.”
PURPOSE OF ADVERTISING
The purpose of advertising is:
1) to enable the public to know the features and uses of the products
and overcome traditions and prejudice that may reduce competition.
2) to make easy and increase the sale of present products, to maintain
consumer’s awareness, to bring it equal with advertisement of competing
firms and to reduce the amount of personal sales efforts required to
receive an order.
3) to introduce a new product model of service in the market.
MEDIA OF ADVERTISING
Media means the source in which the advertisement appears. It is a
singular as well as plural term. Various types of advertising media are
explained as under:-
A. RADIO
Today radio has become very important and can be utilized for
advertising the goods which are sold either within the country or all.
Today’s commercial services of radio Pakistan are becoming very popular
day by day .but life of this advertisement is very short .
B. MAGAZINES
Magazines can be used for the products which are sold out all over the
country .this type of advertisement is not flexible as changes cannot be
made in the advertisement copy easily it is becomes the copy of the
advertisement is to be submitted to the advertising company 4 to 5 weeks
earlier.
C. NEWSPAPERS
These newspapers which are daily or weekly are used for advertising the
goods of local businessman . a newspaper has a very short life as it is
destroyed usually after a period of 24 hours .
D. MEAN SIGNS
It means advertisement through bulbs . this type of advertisement media
is becoming popular day by day in big cities of Pakistan like Karachi
,Lahore and Rawalpindi.
E. ADVERTISING BY POST
Small firms advertise their products through letters ,postcards ,catalogue etc.
F. ADVERTISING BY TELEVISION This type of advertisement delivered
through a television is a combination of spoken words and visual
presentation of products and their benefits .
G. DIRECT MAIL
It is widely used and includes postcards ,letters, catalogues, folders,
booklets etc. they have variability of coverage .large and small
business both can use it. basis of this kind of advertising is mailing
list .this list which has the names of the persons to whom the letters
are sent is compiled from time to time from many sources . It needs
utmost care and up to datedness. This list can be made extremely
selective regarding geographical and consumer interest .It is costly
because of printing. Postage ,typing and packing.
H. CAR CARDS
They are used in street cars , buses , subways and rail road cars where
they may be seen by people on the way to shopping trips etc. They are
effective for all i.e national ,regional and local advertising .They are
flexible and reached the people to whom the magazines don’t reach.
I. PACKAGES ,LABELS AND INSERTS
Advertising copy on package must be brief and should have pictures and
brand name , qualities , companies name etc. Some are bottles and some
are board packages.
J. WINDOW DRESSING
Usually big shop decorates there windows of shop so as to attract
customers. This is also one of the media of advertising. The window is
dressed in such a way that it may attract attention of the buyers.
K. SAMPLING
Some firms distribute there products free of cost so as to advertise its product to secure sales volume in future.
ADVANTAGES OF ADVERTISING
1. It creates demand for a new article by arousing interest of the public.
2. It increase the sales volume of establish articles constantly keeping the selling points afresh in minds of the customer.
3. It educates the general public about new use or uses of a product.
4. It reduces competition.
5. It creates goodwill by continues reminder to the public about the trademarks etc.
6. It increases additional sales by encouraging present customers in
using the articles more frequently and in increased quantities.
7. It facilitates the job of the salesman and dealers by introduction the products to the public.
8. It reduces prices as the production volume increases, which in turn reduces the overhead expense.
9. It insures better quality, improving the quality of goods to have better appeals to the customer.
10. It increases the employment because production increases.
DISADVANTAGES OF ADVERTISING
1. It results sometimes in exaggeration ( over-valuation) and
misrepresentation. Such advertisement misleads the public and loses the
confidence of the public in the enterprises.
2. It expands the market for the articles of luxury and comfort, because
the goods which are needed to meet primary needs of life are not
usually advertised.
3. It causes economic loss due to rapid changes in style creation of new
objects of consumption and changes in style are waste and determinate
to human good.
4. Advertising is impersonal and cannot answer the question asked for by the buyers.
5. It results in monopoly through brands.
IS ADVERTISING A WASTE?
It is not a waste at all. It is an aid to business expansion.
Advertisement help buyers who usually do not know or are really aware of
the existence of the seller. It expands the sellers market by spreading
information about the product. Some people say the advertising increase
the cost of production which is to be borne by the customer. It is
completely wrong. It creates new demands of commodities and the service
which lead t a production on large scale and when the production
increases the cost of advertising is not waste but brings gain in the
business.
DIFFERENCE BETWEEN ADVERTISEMENT AND PUBLICITY
ADVERTISING
1. Some definite message is communicated.
2. It is paid form of publicity.
3. It is non personal.
4. Its sponsor is known.
PUBLICITY
1. It is generally done in form of news, articles, features written in newspaper.
2. No direct payment is involved.
3. It may be personal.
Importance of Advertising 1st Year POC - Principles of Commerce Notes Importance of Advertising karachiboardnotes.blogspot.com DEFINITION ...
May 19, 2014
Posted by Karachi Board Notes
Middlemen and Their Different Kinds
1st Year POC - Principles of Commerce Notes
Middlemen and Their Different Kinds
karachiboardnotes.blogspot.com
INTRODUCTION
“ A business concern that is specialized in rendering services
immediately involved in the purchase or sale of the goods in the process
of distribution is known as middle man.”
There term middle man included all those who operates between producer
and consumers. They function in buying and selling if the commodity. The
wholesalers and retailers are middleman dealing in the ordinary
function of buying and selling. There are other such as brokers.
Commission agents, dealers and merchants who assist the buyers ans
sellers in the market.
KINDS OF MIDDLEMEN
Some of the middle men are explained as follow
1. BROKER:
A broker is an agent involved to buying and selling on behalf of
principal for a commission. He does not hold any stock nor deals with
his own name. his function is only to negotiate and make contract of
sales and purchases on behalf of others. He is paid for his labour
called as brokerage. There are different classes of brokers. They are
produce broker, stock broker, insurance broker and ship broker.
2. FACTOR:
He is an agent whose function is to receive goods from his principal for
sale in commission. He can sell goods in his own name, pledge goods in
his own possession receive payments and gives receipts. He is liable on
contract of sale he enters into on behalf of his principal. A factor is
also called a consignment broker.
3. COMMISSION AGENT:
He acts on behalf of foreign importer. His function is to buy goods on
behalf of client abroad and to dispatch them in accordance with the
instructions. He receives a commission for his service.
4. UNDERWRITER:
They enter into agreement with promoters of newly started company which
have not been taken up by the public. For this guarantee they are paid
commission known as underwritten commission.
5.DEL CREDERE AGENT:
He is an agent who in consideration for extra remuneration called del
credere commission. Guarantees to his principal that the third person
with whom he enters into contracts shall perform their obligation. Thus
such an agent guarantees to his principal that he will only sell to
person who will pay for what they buy and if the buyer does not pay, he
will pay.
6. TRAVELLING AGENT:
Sometimes wholesalers appoints number of agents who goes from place to
place , show catalogues, price lists etc. to retailers , book orders and
forward them to their principals who executes them. They receive their
commission in return of their service.
7. SELLING AGENT:
Sometimes wholesalers and manufactures appoints certain shop-keepers in
different parts of the country as their selling agents. These agents
receive commission on all sales in addition to the expenses which they
have incurred on behalf of principal.
8. AUCTIONEERS:
An auctioneer is an agent who sells goods by auction ie to the highest
bidder in public competition. He has no authority to hold the goods sold
and can deliver the goods only on receipt of price. He is the agent of
the vender.
9. FORWARDING AGENT: This is the type of agent who is engaged in forwarding the goods to there destination on certain charges.
10. CLEARING AGENT:
This agent is involved in clearing the imports on behalf of their
principal. The duties include taking the delivery of the goods from the
ship and attending to custom formalities for certain commission.
DISTINCTION BETWEEN FACTOR AND BROKER
Factor
1. He has the possession of goods or documents which entitle him to the possession.
2. He carries out the trade with his name.
3. He is himself liable in respect of the contract of sale.
4. He receives payment from the customer and gives him discharge.
5. He has lion in respect on goods in respect of his commission. Broker
Broker
1. He has no possession of the goods which he sells.
2. He brings together both the parties to a transaction. The sale is made in the name of the principal.
3. He is not liable in respect of such contracts.
4. He does not receive payment of the value of the goods from the customer and cannot give his discharge.
5. He has lien on goods.
Middlemen and Their Different Kinds 1st Year POC - Principles of Commerce Notes Middlemen and Their Different Kinds karachiboardnotes.blogsp...