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1. What you mean by private sector enterprises?
Ans. Private enterprises are those institutions which are under the ownership, control and administration of an individual or a group of individuals. Sole proprietorship, joint family business etc are examples. Here the profit and loss go to the owner or owners of the business.
2. What you mean by public sector enterprises?
Ans. Enterprises under the ownership and control of the Central Government or the state Government are described as public sector enterprises. The investment of capital of these firms will be made by the government either fully or mostly. The management of such firms will be completely under the control of the government. Public welfare is the motive of their functioning. There fore profit making is not the most important objective of such firms. Instead they aim at achieving social and economic welfare of the people. Public sector enterprises are responsible and accountable to the public for their activities and results.
3) Write the examples for public sector?
Ans.
1) Indian Railway
2) Life Insurance Corporation
3) Kerala State Road Transport Corporation
4) Kerala State Electricity Board
5) Postal Department
6) State Trading Corporation (STC)
4. Prepare a note about three types of public sector organization.
Ans.
1. Departmental Undertakings:-
A departmental undertaking is created as per the decision of the government. Such undertakings will be functioning direly under the control of the government. The capital is raised through treasury allocation. The income form such enterprise will have to be remitted in the treasury of the government. These organizations ensure protection of public interest and hence they have “service” at their prime motto.
Characteristics:-
• It is established either by a department of the government or particular ministry.
• It is apart of the government itself.
• A specific amount is allotted in the annual budget of the government as capital for it.
• The control and management will be vested in the ministry or the department.
• There is no power of self government in financial matters.
Examples:-
• All India Radio
• Post and Telegraph
• Doordarsan
• Indian Railway
• Chitharanjan Locomotives, Kolkata
• Integral Coach Factory, Chennai, Ordinance Factories
• Diesel Locomotives, Varanasi
2. Statutory Corporations: -
The statutory corporations are also called the public corporations. A statutory corporation is a company established by the special legislation of the parliament or the legislature. Its objective, authority, sphere of activity etc will be in accordance with the provision of the laws passed by the legislature. The whole money required for its running will be given by government. However, it will be a self governing institution.
Characteristics: -
• It is formed by special legislation enacted by the legislature.
• It has a legal entity separated from the government.
• It is purely under the government ownership
• It can formulate its own fiscal policy.
• It is responsible to the parliament or the legislative assembly.
• These are mainly meant for providing service to the people. The profit motive is only secondary.
• The appointments are made on the basis of the condition of the corporations.
Examples
• Air India
• Life Insurance corporation (LIC)
• State Bank of India (SBI)
• Industrial Finance Corporation (IFC)
• KSRTC * KSIDC *KSFE
3. Government Companies
Public sector institutions which are formed in accordance with the provisions of the Indian Companies Act are known as government companies. Such companies mobilize capital through the issue of share. If more than 51% of the share capital lies with the central government or any state government, such companies are called government companies.
Characteristics:-
• These are formed in accordance with the company Act of 1956.
• The administration of the company is carried out by aboard of directors.
• More than 51% of the paid up capital of the company will be that of the government.
• It has separate legal entity from the government
Examples:-
• Hindustan machine tools limited.
• Hindustan steel limited
• Indian oil corporation
• Kerala Automobile limited
• KELTRON
5. Write a short note about Business Enterprises?
Ans. A Business enterprise is an organization established with the purpose of achieving certain objectives. The production of different articles or services, marketing, mobilization of capital, finding out the suitable human resources etc. are included in the functions of business. Different departments are formed for carrying out these functions efficiently and effectively.
6. What you mean by Management?
Ans. Management is the only means to achieve the proposed objectives through organized activities. Management includes the process of the business activities the organization of different factors of production, the appointment of employees who are to carry out the activities of production and make available the proposals and co-ordination necessary for the business activities. In effect the management of a company includes the different heads of departments of company and its general manager and board of directors.
7. What are the different departments of a business firm?
Ans.
• Purchase stores department
• Production department
• Marketing department
• Human resources department
• Fiancé department.
• General administration department.
8. What are the functions of the purchase stores department?
Ans.
• Purchase of right materials at the right quantity and in the right quality.
• Identification of right supplies.
• Purchase at the right price.
• Ensure uninterrupted production through supply of materials.
• Transfer of materials to the production department.
• Minimization of loss in the warehouse.
• Identify and control excessive storage and coaseful consumption.
9. What are the functions of the production department?
Ans.
• The location of the production unit:- It will be decided on the basis of availability of raw materials, means of transportation, nearness to market, availability of skilled workers, the availability of basic requirements such as water, electricity etc.
• Production designing: - The product is formulated on the basis of facility for handling, utility, attractiveness, multi- purpose utility etc.
• (a) Formulation of the process of production: - A single production process will be sufficient for the production process will be sufficient for the production of certain products. But for the production of some products more than one process of production will be required.
Example:-
• The process through which the manufacture of textiles passes through (i) spinning (ii) dyeing (iii) weaving (iv) giving finishing touches (smoothening, beautifying, etc). It is the production department that decided the number of process of production for each product.
10. What are the functions of the marketing department in business?
Ans. The different functions of the department of marketing can be summarized as follows:-
• Purchase and store.
• Sort out things and ensure quality
• Store the products
• Reach them to the consumers
• Provide financial help
• Bear the loss
• Collect details regarding the market
• Market the products.
11. What are the marketing functions of the marketing management?
Ans.
1. Exchange activities: -It includes purchase, store and sale
2. Distribution activities: - It includes transportation, storage etc.
3. Facilitating functions: - Consolidation, classification, packaging, advertisement, insurance etc are included in it.
12. Write short note about “Financial Departments?
Ans. The money, finance or savings that is necessary for carrying out the business activities are known as finance or wealth. No business can be carried out with out money. Therefore money or capital is the life blood of business. It is the duty of the finance department to decide the channels through which money is to be mobilized and low it is to be utilized.
The different activities of the finance department.
1. Mobilization of finance :-
The finance department of business firm first estimates and assesses the amount of money required for each department in the firm. Thereafter, it starts the mobilization of finance.
The following methods can be utilized for the mobilization of finance.
• Through share capital
• Through loans
• Through overdrafts
• Through cash credit system
2. Allocation of finance and its utilization :-
Finance is utilized in accordance with the requirement of fiancé for each department, the gains from that investment, and the importance of the activity which requires the finance. It is the responsibility of the finance department to ensure that finance is properly utilized for right requirements.
3. Fixing up dividends:-
The profit always goes to the owners of the business. This profit can be either shared among the owners or re- invested in the business. It is the finance department that decides this proportion.
4. Select projects accordingly after ascertaining the availability of funds.
5. Be prompt in depositing interest relevant to the amount loaned.
13. Explain the functions of Human Resources Department?
Ans.
1. Manpower planning:-
The most important function of the Human resource development is to estimate in advance the human resources required in future. This process is known as human resource planning. Fixation of qualification required for the employees, experience, aptitude etc. are also the functions of the human resource department.
2. Finding out of human resources:-
It is the procedure of finding out the required employees and to persuade them to apply for the job. It aims at receiving applications from a number of persons who seek employment. Advertisements can be made though newspapers, television, radio, employment exchange and other institutions.
3. Selection:-
All those who apply for the job may not be suitable for the same. Even if they are qualified all cannot be recruited. There fore selection is the process of selecting the most suitable persons and appointing them. Suitable persons can be selected through different types of examination, interview testing experience, physical fitness determination etc.
4. Training:-Training is the process of improving knowledge and expertise of an employee for doing a particular work. The main objective of training is to bring about a substantial change in the behavioural patterns of the employee. If the employees are well trained, loss of resources and depreciation of the machinery can be minimized. It causes to enhance efficiency. Misuse is avoided and production is increased.
5. Salaries and other Incentives:-
Laborers constitute the most indispensable factor of production. The labourers are to be paid reasonable wages inorder to ensure that sufficient workers are available and that they will not give up their jobs and leave the firms. The labourers are to be paid in accordance with their work and incentives also are to be given . All these are to be done by the human resource department.
14. What are the functions of the General Administrative Department?
Ans.
• Maintain and kept the records.
• Prepare the records and documents
• Function with the help of information technology
• Function in collaboration with other departments
• Find out solutions for common problems
• Facilitate communication
• Administer the affairs of the office
• Keep the assets and carry out their maintenance works
• Make effective public relations
• Prepare legal documents.
• Explain all the legal implications in detail to the other departments.
15. What is accounting and write their principles?
Ans. The writing down and keeping of accounts regarding the buying and selling, income and expenditure of the business firm is known as accounting. Theoretically and practically there should be correct knowledge about accounting. Then only accounting can be carried out without errors.
There are certain general principles which have been accepted for accounting. These principles are
1. Separate Entity Principle:-
The activities of business firms are controlled by its owners. But according to this principle business firms will have a separate entity independent of its owners. It means that business firm will have artificial entity. According to this principle the business and its owner are viewed separately.
Eg: Raman starts a business firm investing Rs 75,000/- as capital. Here it is to be accounted that the business firm accepts Rs 75,000/- from Raman. As per this principle there is a separate entity between
the Raman and the business firm. Therefore the business firm is bound to pay back Rs 75,000/- to Raman. It will remain as a liability on the part of the business. Until the amount is paid back.
2. Going concern Principle:-
Any business should not be started with the aim of stopping its function immediately. Business has along standing existence. Business transactions are to be recorded based on this principle.
Eg: Business firms avoid loans from banks for their business activities. Banks advance loans to business firm under the impression that they have long standing existence. Banks will never advance loans to such firms which are under the threat of immediate closure. Accounting activities are carried out on the basis of principle that business firm have long standing existence.
3. Money Measurement:-
This principles show that transactions which can be measured interms of money only can be accounted. Non monetary transaction cannot be recorded.
Eg:- Raman might have sought the advice of his friends with regard to starting the business. This help cannot be measured in terms of money. There fore such matters cannot be recorded in accounts.
4. Dual Aspect:-
Any transaction occurring in a business firm will have two accounting aspects. They are called debit and credit. Based on these aspects the basic equation of accounting is formulate, ie, Asset = Capital + Liability
5. Cash Book:-
Most of the business transactions are carried out in ready cash. The special book used for recording such money transaction is kwon as ‘cash book’. It is a book in which the receipt and payments of money are recorded. The actual payments and receipts are recorded in it. Money ‘receivable’ and money ‘payable’ are not recorded in it.
16. What you mean by “Double entry system of Accounting”?
Ans. Every business transaction has two aspects a debit aspect and an equal and corresponding credit aspect. The debit amount will be equal to the credit amount. Such a system of accounting is called double entry system of accounting.
17. Merits and demerits of transference of public sector organization into private sector?
Ans.
Merits:-
The existence of private sector depends upon the satisfaction of its customers. The chief motive behind the functioning of this sector is profit making. Therefore, private enterprises pay utmost importance to ensuring the quality of their products. It is believed that when institutions in the public sector are privatized, the efficiency of their labourers will increase. Management will become more effective. Novel strategies will be adopted for the product to win the market. A variety of products will be available in the market. Applications of latest technical know – how.
Demerits:-
Many labourers lose their jobs when a public enterprise gets privatized. Private institutions spend a lot of money on advertisement for the promotion of sale of their products. In fact, it is the customers who carry the burden of their extra expenditure. The sole aim of public enterprise is the service of common people. But private institutions run with the intention of profit making. The very feature of privatization is the excess exploitation of natural resources. Consumerism (The state of affairs when even drinking water has to be purchased).
18. What is cash book?
Ans. Cash book is a book which receipts and payments in money are recorded. Money receivable and money payable are not recorded in the cash book.
19. What are the characteristics of public corporation?
Ans. The characteristics of public corporations are
• They come into existence by an act of the legislative assembly or parliament
• Legally it has go its own entity
• It is completely owned by the government, ie, the equity capital is completely contributed by the government.
• Financially, it is an autonomous body.
• Appointments are made in accordance with the terms and conditions decided by the corporation.
• Public corporations are primary meant for rendering services to the people profit making is only secondary.
• It is a self governing body. It will have its won well defined bye-laws.
20. If managed efficiently, the objectives of the business can be full filled. Explain.
Ans. An organization of individuals can achieve himself. Wherever there are organized groups working for a common objective, their activities have to be handled effectively and efficiently. If the members of the organization are let to work according to their whims and Fancies complete confusion and disorder will be the result. There fore if an organization is to function successfully, there should have some one to control its activities. Such a management car make the members of the organization, aware of the objectives of the organization and their activities can be directed towards achieving the objectives. Therefore management is an inevitable factor of any organized activity. There are certain common factors of management applicable to all organizations. Though management is essential in all the fields, business firms are particularly in need of it. A modern business firm has to face several challenges. In order to overcome these challenges efficient management is inevitable. Through efficient management is inevitable. Through efficient management, the objectives of the business can be achieved.
21. What are the objectives of preparing the cash book?
Ans. Cash book is the account book in which the receipts and payments of money are recorded. Cash account is prepared in the form of a cash book. Al the details regarding the income and expenditure in ready cash for a particular period can be obtained from the cash book. The amount of cash balance in hand also can be known from the cash book.
The special aims of preparing cash book are
• Help to create an understanding about expenditures and there by to control the expenditures.
• Helps to compare each and every expenditure monthly.
• Helps to determine in advance future expenditure and to prepare budget accordingly.
22. A joint family company is private sector business enterprise. Explain its working.
Ans. All the members of the family live under the same roof without dividing and sharing the property. This system is known as joint family system. The ownership of such business is entrusted with all the male members of the family. The male members belonging to three generations i.e., father, son, son’s son (Grandson) get the right of inheritance to the ancestoral property from the very moment of this births. The eldest member of the family conducts the family business. He is known as karta (eldest male member). The other male members have no authority to interfere in the activities of Karta.
23. The duties of certain department of a business firm are given below. Find out the departments to which those duties belong.
a. Sorting
b. Determination of dividend
c. Determination of wages and other privileges
d. Preparation of legal documents
e. Formulation of product
Ans. a) Marketing departments,
b) Finance department,
c) Human resource department
d) Public administration department
e) Production department.
24 Separate departments are formed in a business organization for different function of business.
(a) Name the departments formed in a business.
(b) Which is the department responsible for the supply of raw materials
(c) Safe the other function of that department
Ans.
(a) Purchase- stores department
• Production department
• Marketing department
• Finance department
• Human resource department
• General administration department
(b) Purchase stores department
(c) Other functions
• Identification of right supplies
• Purchase at the right price
• Ensure uninterrupted production through supply of materials
• Transfer of materials to the production department
• Minimization of loss in the ware house. Identity and control excessive storage and wasteful consumption.
25. The functions of Human Resource Department include the selection and identification of the human resources required for the effective conduct of a business firm. Elucidate.
Ans.
The functions of the human resources Department include the following:-
• Appoint right men for the effective conduct of the business activities.
• Give appropriate training for the selected candidates.
• Provide right motivation for the employees
• Fix salary and other incentives
• Carry out welfare activities
• Carry out the planning and functioning of human resources.
26. Classify the following industrial undertaking according to their nature and prepare a table.
• Chittaranjan locomotive works
• Reserve Bank of India
• All India Radio
• Damodar Valley Corporation
• Hindustan Aeronautics Ltd.
• KELTRON
• Post and Telegraph.
Ans
27. The names of some business firms are given below. Find out the group of institutions to which they belong.
(a) The sita flower shop run by Raman.
(b) The R & R stationary shop runs by Raju & Raghavan
(c) Malayala Manorama Ltd company
(d) Rubber marketing society
(e) Indian Railway
(f) Life Insurance Corporation
(g) Indian oil corporation.
Ans.
(a) Sole proprietorship
(b) Partnership business
(c) Joint stock company
(d) Co-operative society
(e) Departmental institution
(f) Public corporation
(g) Government company
28. Complete the following flow chart by adding an activity after finding out to which department of a business enterprise it belongs.
Ans. 
29. Match the items given in column A, B, & C
Ans. 
30. On 1st January 2010, Manu started a business with Rs 10,000/-. His transactions are given below. Prepare cash book related Manu’s transactions.
2010 January
3. Purchased notebooks and pen worth Rs . 2500
7. Sold goods for cash Rs. 1000
9. Received commission Rs. 250
12. Purchased furniture for Rs. 2000
13. Paid wages Rs. 500
15. Sold books worth Rs. 1600
25. Purchased office equipments worth Rs. 750
31. Paid rent Rs. 500
Ans.
