Business Correspondence – Business Management Ethics and Entrepreneurship Notes

Business Correspondence – Business Management Ethics and Entrepreneurship Notes

Meaning of Business Correspondence:
Communication through exchange of letters is known as correspondence. We communicate our feelings, thoughts etc. to our friends and relatives through letters that may be called personal correspondence. A Businessman also writes and receives letters in his day-to-day transactions, which is called business correspondence.

Business correspondence or business letter is a written communication between two parties. Businessmen may write letters to suppliers of goods and also receive letters from the suppliers. Customers may write letters to businessmen, seeking information about availability of goods, price, quality, sample etc. or place order for purchase of goods.

Importance of Business Correspondence:

• Help in maintaining proper relationship
• Inexpensive and convenient mode
• Create and maintain goodwill
• Serves as evidence
• Help in expansion of business.

Essential Qualities of a Good Business Letter:
(a) Inner Qualities: The inner qualities of a good business letter refer to the quality of language, its presentation, etc. These facilitate quick processing of the request and that leads to prompt action. Let us discuss the various inner qualities of a good business letter.

• Simplicity
• Clarity
• Accuracy
• Completeness
• Relevance
• Courtesy
• Neatness

(b) Outer Qualities: The outer qualities of a good business letter refers to the appearance of the letter. It includes the quality of paper used, colour of the paper, size of the paper etc. Good quality paper gives a favourable impression in the mind of the reader. It also helps in documenting the letters properly. Let us discuss the various outer qualities of a good business letter.

• Quality of paper
• Colour of the paper
• Size of the paper
• Folding of letter
• Envelope

Parts of a Business Letter:
The essential parts of a business letter are as follows:
1. Heading: The heading of a business letter usually contains the name and postal address of the business, E-mail address, website address, Telephone Number, Fax Number, Trade Mark or logo of the business (if any)

2. Date: The date is normally written on the right-hand side corner after the heading as the day, month and years. Some examples are 28th Feb 2003 or Feb. 28, 2003.

3. Reference: It indicates letter number and the department from where the letter is being sent and the year. It helps in future reference.

4. Inside address: This includes the name and full address of the person or the firm to whom the letter is to be sent. This is written on the left-hand side of the sheet below the reference number.

5. Subject: It is a statement in brief, that indicates the matter to which the letter relates. It attracts the attention of the receiver immediately and helps him to know quickly what the letter is about.

6. Salutation: This is placed below the inside address. It is usually followed by a comma (,). Various forms of salutation are:
Sir/Madam: For official and formal correspondence Dear Sir/Madam: For addressing an individual Dear Sir/Dear Madam For addressing a firm or company.

7. Body of the letter: This comes after salutation. This is the main part of the letter and it contains the actual message of the sender. It is divided into three parts.
(a) Opening part: It is the introductory part of the letter. In this part, attention of the reader should be drawn to the previous correspondence, if any. For example with reference to your letter no.326 dated. 12th March, 2003,1 would like to draw your attention towards the new brand of television.

(b) Main part: This part usually contains the subject matter of the letter. It should be precise and written in clear words.

(c) Concluding Part: It contains a statement of the sender’s intentions, hopes or expectations concerning the next step to be taken. Further, the sender should always look forward to getting a positive response. At the end, terms like Thanking you, With regards, With warm regards may be used.

8. Complimentary close: It is merely a polite way of ending a letter. It must be in accordance with the salutation.

9. Signature: It is written in ink, immediately below the complimentary close. As far as possible, the signature should be legible. The name of the writer should be typed immediately below the signature.

10. Enclosures: This is required when some documents like cheque, draft, bills receipts, lists, invoices etc. are attached with the letter.

11. Copy circulation: This is required when copies of the letter are also sent to persons apart of the addressee. It is denoted as C. C. For example.

C.C.

• The Chairman, Electric Supply Corporation
• The Director, Electric Supply Corporation
• The Secretary, Electric Supply Corporation

12. Postscript: This is required when the writer wants to add something, which is not included in the body of the letter.

Types of Business Letters:

Formal Letters	Informal Letters
1. Sales – purchase letters	1. Memorandums
2. Order letters,	2. Appraisals
3. Enquiry letters	3. Interview
4. Claim letters	4. Thanksyou letters
5. Dispute settlement letters	5. Reference letters
6. Agreement letters	6. Cover letters
7. Sales Report etc.	7. E-mails etc.

Human Resource Correspondence:
Personnel department deals with all matters relating to staffing night, from recruitment to retrenchment. In earlier times, the administration sections charges these functions. Later on, it acquired the name of personnel department. With the passage of time, more and more CEOs realised the is men and not necessarily the machines that change the fortunes undertakings.

Effective HR Letters:
HR letters are also called EmploymentJEmployer/Personnel Letters.
HR Letters includes the following:

• Acknowledging a receipt of resume
• Making job offer
• Rejecting a candidate
• Welcoming a new employee
• Notifying an employee of a promotion
• Recognizing an employee for superior performance
• Disciplining an employee etc.

These letters must be coherent, informative and legally sound.
Letter must satisfy the goal of avoiding, reducing or reasoning liability (in accordance with the situation i.e. rejection letters).

Job Application:

• Job Application is always drafted in response to advertisement.
• Job Application is like sales circular because in job application we are offering our skills for a price.
• A person may write a comprehensive application which would contain all details about one’s education and experience.
• Job application is similar to sales circular.
• To receive curriculum vitae (CV) by fax or email.

How to write an Effective Application Letter:
1. Get off to a direct start: In your first paragraph explain why you are writing, job title, name of company etc.

2. Offer something different than what’s in your resume: Your application must differ from your resume, you can be a bit personal (but not much).

3. Make a good case: Write it in the sense which move you at the next level; an interview. Then finally toward ultimate goal: get a job offer. So include all necessary details and remove all unnecessary.

4. Closure with important details: Include contact information and end up with a polite thank you.

Resume:

• Resume is pronounced as rez-Qom-ay
• It is a record of ones professional as well as personal detail.
• It may be enclosed with job application.
• A good resume should not be very long.
• One should not let it go beyond three pages.
• Terms like Bio-data, curriculum vitae or datasheet are also used describe documents.
• Personal details, like age, sex, race or nationality.
• Minor details should be omitted to make room for achievements & skills.

Notes:
1. Resume should contain following characteristics:
→ Career goal and specific job objective should be mentioned.
→ Revealing adequate knowledge about the company being approached. –
→Explaining how your qualification and experience suits the position offered by the company.
→ Giving evidence of writing skills to company.

2. Points common to all CV’s/Resumes:

• Personal particulars
• Academic Qualification
• Additional Qualification
• Experience
  Functional: emphasizing the skill and talent of the applicant
  Chronological: emphasizing on work experience or listing job description
• Additional Information may include languages known and anything such as hobbies, any achievements etc.
• References.

Specimen of Job Application:
The Manager (HR)

18th April 2012

Development Bank
Madras Cross Road
Chennai – 256700
Dear Sir/ Madam,
IT Consultant
Your Advertisement ………………………………………………. Salutation …………………………………………………………………
…………………………………………………………………. Introduction ………………………………………………………………………………..
…………………………………………………………………… Body …………………………………………………………………………………………..
……………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………..Conclusion …………………………………………………………………….
……………………………………………
Yours Faithfully
XYZ
Ends Resume

Element of Curriculum Vitae or Sample Resume:

• Personal Data: Name, address, Telephone or contact number, DoB, Sex, Marital Status
• Objective: desired position
• Education: Include College/Universities, month & year of your graduation, list of your degree (without the use of abbreviations).
• Work experience: List your job titles, name of organisations you worked for and dates of your employment
• Honors/Activities/Achievements/Publications: If any
• Other Sections: Summary of qualification, Interests,
  Languages (computer or any specific)
  Professional Membership
  Volunteering
• Reference

Specimen of CV

Curriculum Vitae

Name: XYZ
Birth: DD/MM/YYYY
Nationality: Indian/NRI
Permanent address: ………………………………………………………………………………………………………………
Telephone: ……………………………………………………………………………………………………………………………..
E-mail: …………………………………………………………………………………………………………………………………….
Workplace: …………………………………………………………………………………………………………………………….
Education: ……………………………………………………………………………………………………………………………..
Language: ………………………………………………………………………………………………………………………………
Interest: ………………………………………………………………………………………………………………………………….
Reference: 1. …………………………………………………………………………………………………………………….
: 2. …………………………………………………………………………………………………………………….

Interview:
→Some companies conduct initial interviews telephonically and shortlist candidates for final interviews.
→ Interview letter should contain information about the position applied for, date, time and venue of the Interview.
→ Interview letter should give sufficient notice to the candidate to enable them to confirm their attendance in the interview with their original certificates.

Specimen of Interview letter

Letter Head of the Organisation

Date ………………………………

To
Name
(address)
Dear (Name),
Please refer to your application for the post manager in our company (salutation)
……………………………………………………………………………………. Body ………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………….
We regret to inform that we do not reimburse the travelling expenses of the local candidates.
Please confirm telephonically that this appointment suits you.
Yours Sincerely
Sd /-
Manager – Human
Resources

Short-listing Candidates:

• Companies may short-list candidates for absorption in near future if the company is unable to find suitable positions for candidates at the time of interview.
• Details are stored in the databank & a polite letter is addressed to them.
• A letter by company is written for informing candidates about his shortlisting for an offer of an appointment.

Letter of Appointment:

• Initial intimation to the candidate is given through a brief provisional letter.
• But the final document must be drafted carefully as the terms of employment are stated in the letter.

Provisional Letter of Appointment:
Dear (Name),
Please refer to your application and the subsequent interview for the post of Systems Manager in HCL Ltd.
We are pleased to inform that you have been selected for the position. A detailed letter to be mailed you soon.
Your Sincerely,
Manager – (HR)

Terms of Appointment:
Detailed offers of appointment normally mention terms of appointment and seek the acceptance of the selected candidate.
It is advisable to insert clauses which anticipate organisational changes & protect company’s interests.

Specimen

(Letterhead)

Ref No.:
Date:
To,
Mr. XYZ (address)
SUB: Appointment Letter
Dear ……………………………………. ,
Please refer to our earlier letter dated DD/MM/YYY.
As stated earlier, we will be pleased to hire your services as a (Post) if you accept the following terms and conditions.
1. Place of Operation: ……………………………………………………………………………………………………………………………………………………
2. Remuneration: ……………………………………………………………………………………………………………………………………………………………
3. Duties: …………………………………………………………………………………………………………………………………………………………………………..
4. Probation: ……………………………………………………………………………………………………………………………………………………………………
5. Confirmation: ……………………………………………………………………………………………………………………………………………………………..
6. Terms of Leave: ………………………………………………………………………………………………………………………………………………………….
7. Retirement: ………………………………………………………………………………………………………………………………………………………………..
Please sign a copy of this letter and fax it to 036-07834531 in acceptance of the terms and conditions and report to the Human Resource Manager on DD/MM/YYYY at HRS: MIN AM/PM We welcome you to HCL (India) and wish you a successful career. Your Sincerely,
Manager – Human Resources

Confirmation of an employee:

• After the completion of probation period, the employee is to be explicitly informed about his confirmation in the organisation.
• A letter is posted by company to the candidate

Specimen of letter calling candidate for written test

(Letter Head)

Date:
Ref No:
(Name)
(Address)
Dear Sir,
Subject
With reference …………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………….. ……………………………………Introduction ………………………………………………………
………………………………………………………………………………………………… Rules for examination ……………………………………
Thanking you
Sd/-
(R.F.)
Personnel Manager

Specimen of Regret Letters

(Letter Head)

(Name)
(Address)
Date: DD/MM/YYYY
Dear Sir,
Sub: Recruitment for post of Finance Manager We refer to your application dated 1st March 2012
…………………………………………………………………………………. (Body) ……………………………………………………………………….
……………………………………………………………………. (Conclusion) ………………………………………………………………………….

Yours Faithfully
Sd/-
(XYZ)
Personnel Manager

Goodwill Letters:
Goodwill letters are not mandatory but they are required to be written in order to enhance the relation and increase the goodwill of the organisation.

• These letters are not compulsory to be written
• Goodwill letter should be brief
• Goodwill letter must be sent promptly in order to be relevant and effective
• They are likely to be handwritten

Types of Goodwill Letter:
Every business letter should be a goodwill letter

• Thank you Letter
• Congratulatory Letter
• Letter of Sympathy
• Condolence Letter
• Obituary Notice

Thank you letters: There are several instances in our personal as well as professional lives when people do favours for us. Sometimes we take them for granted and do not thank them for their favours. To earn precious goodwill a thank you letter must be drafted.

Congratulatory letters: Friends, Colleagues and business associates may earn a promotion, recognition or an award for achievement in both the personal and professional area. A letter of facilitation should be sent to earn a goodwill in the process.

Letter of Sympathy: It is important to share the pains of our friends and associate. A letter of sympathy is drafted to share the feelings of our colleagues, friends and associates. There is a word of caution such letter are only sent when someone suffers a major loss or illness.

Condolence letter: These letters are the most difficult to draft since we are writing to people who have lost someone very dear to them. Strong sense of grief is to be shared in order to provide some relief. So a condolence letter is written to people who have lost someone very dear.

Obituary Notice: These notices provide news about the people who have recently passed away.

Obituary
XYZ Ltd. announces with deep grief the passing away of its Managing director Mr Ram in a car accident near Mathura high way on Monday. His mortal will be consigned to flames at (Name of place), Delhi on Wednesday 16th Jan 20xx at 10:30 AM

Note:

• Letters carrying positive news are called Direct Approach Letters.
• Letters conveying unwelcoming news (i.e. rejection or decline etc.) are called Indirect Approach Letters.’
• All kinds of letters whether long or short need careful planning

Purchase Correspondence:

• Most people believe that selling is the most challenging, important as well as toughest job.
• Purchasing is same as selling it is also a tough job to do.
• Selling and Purchasing are inter-dependant.

Enquiries:

• First as well as foremost step of commercial transaction is enquiries.
• Enquiry is the most common business communication
• Enquiry letter should be drafted clearly and the message to be conveyed should be complete.
• An enquiry should be compact, straight forward and courteous.
• An enquiry should be incorrect tone.

Essentials of Drafting an Enquiry:

• Clear Reporting: The kind and quantity of goods required should be mentioned clearly.
• Samples, specifications should be sent along with letter.
• Handling: Proper checking and handling of items should be there.
• Mode of Payment: Mode of payment should be clearly specified whether in cash, cheque etc.

Replies:

• Reply of each and every enquiry should be sent.
• Enquiries from big business deserve more attention hence a good reply should be sent to big business houses.
• Requests for only a catalogue or a price list may not need a covering letter.

Industrial Enquiries:

• These enquiries may use technical jargon.
• Receiver of the letter should be able to understand the enquiry referred.

Replies to Industrial Enquiry:

• Reply must be polite and expeditious.
• Reply of an enquiry should begin with an expression of gratitude and state at the outset that requested documents are being sent.
• Reply must not begin with refusal.
• Reasons for turning down business offer should be explained.

Estimates:

• Estimates are sought and provided where services rather than off-the-shelf goods are involved.
• If a customer ask for an estimate for the complete job an estimate should be provided to the customer with necessary details.

Tender Notice:
It is an invitation to submit “bids” to provide such goods/services on a large scale at a quoted price with respect to certain conditions.

Essentials for Preparation of Tender Notices:
→ It should be prepared in serial, tabular or paragraph form.
→ These tenders are open for all, often for purpose of pre-qualification or limited ones. The registered and eligible parties gets shortlisted on the basis of pre-qualification tenders.
→ Some job which involves huge amount of foreign loans/assistance may be offered through global tenders
→Tender notice also includes estimated value of work to be done and goods delivery details.

Tender Process:

• It should be submitted on the stated date as well as at time mentioned in sealed covers.
• Specified enclosure must also accompany them e.g. EMD Earnest Money deposit, normally 2% of estimated value.
• Party getting the contract has to replace it with performance guarantee of up to 10% of the estimated value.
• Usually the principle of “lowest bid gets the contract”.

Specimen Pre – Qualification Notice

(Letter Head)

Notice No:
Invitation for Pre-Qualification
1. ……………………………………………………………………………………………………………………………………………………………………………………………..
2. ……………………………………………………………………………………………………………………………………………………………………………………………..
3. ……………………………………………………………………………………………………………………………………………………………………………………………..
4. ……………………………………………………………………………………………………………………………………………………………………………………………..
5. ………………………………………………………………………………………………………………………………………………………………………………………………
6. ……………………………………………………………………………………………………………………………………………………………………………………………..
7. ……………………………………………………………………………………………………………………………………………………………………………………………..

AO.
DDA (Dwarka)

Date: DD/MM/YYYY
Limited Tender
Name of the Organisation
Notice Inviting Tender/Tender
Notice ……………………………………………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………………….. Body of the Tender …………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………..
Date:

Sd/-
Post

Placing Order:
These order forms are usually pre-numbered which helps buyer in placing an order.
Terms and conditions are printed overleaf. Attention must be paki to this tact.

Letter Order:
Essentials to place order through Letters:

• An authorization to the seller
• An accurate description of goods
• Catalogue number ¡f ordering out of it
• Quantity or number required
• Price per unit and total amount involved in the transaction
• Delivery details such as time and place
• Payment terms agreed I.e. whether on delivery or after availing credit.
• Polite closing, inviting a confirmation of acceptance

Specimen of Order Letter:

(Letter Head)

Order No.

  Date. ………………………

Address:
Dear Sir,
SUBJECT
………………………………………………………………………………………………………………………………………………………………………………….
………………………………………………………….. Body of the Letter …………………………………………………………………………………..
…………………………………………………………………………………………………………………………………………………………………………………..

Terms and Conditions:
1. Price
2. Discount
3. Excise Duty
4. Sales Tax
5. Despatch
……………………………………………………………………………… Conclusion …………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………….

Yours faithfully,
Sd/-
(Post)

Making Complaints:

• Essential points to be kept in mind while making complaints.
• Delay should not be there while making complaints because as the time passes the matter gets complicated.
• Both sides should be heard so as to find the person who is guilty.
• The complaint made by consumers should be based on factual information.

Sales Correspondence:
AIDAS plan is an effective sales correspondence which lists down the following essentials:
A → Attention
I → Interest
D → Desire
A → Action
S → Satisfaction
These are usually combined or blended so smoothly in a well-written persuasive message that it is difficult and unnecessary – to separate them.

Strategic Marketing:
It is a very good strategy to first define our buying motive and the segment we are trying to motivate and then, write according to the conclusions arrived.

Sales letter:
→ A sales letter is always written to an individual with his specific needs in mind.
→ Specimen of a sales letter

Dear (Name)

• Salutation
• Different Packages
• Comparison of different packages
• Conclusion ;

Yours sincerely,

Sales Circular:

• A difference between a sales letter & a sales circular is subtle.
• A sales circular is drafted keeping large number of people in mind.
• Large number of audience in this circular is addressed with single salutation for e.g:- Subscribers, Investor, client etc.
• By the help of Mail Merge facility every circular can be addressed by the names as well as addresses.
• A specimen of a sales circular is same as sales letter but a sales circular contains subtitle.

Sales circular can be formed for various purposes such as:

• Circular informing seasonal discount
• A circular letter to dealer announcing off-season discount scheme.
• A circular to stockists announcing special incentive scheme.
• Circular informing increase in price.
• Circular informing appointment of sole-selling agent.
• Circular informing price scheme.
• Circular informing special concession.
• Circular informing change of address.
• Circular announcing opening of New Regional Office.

Advertisement:

• Advertisement is the biggest example of paid communication.
• The purpose of advertisement is to impart information about the activities performed by the society.
• The other purpose of advertisement is to develop attitude and also to induce action beneficial to the advertiser.

Advertisement is used for following purposes:

• Building of strong public Image.
• Opening a new factory or sales office.
• Explanation by management on a strike by workmen.
• Informing the consumers and the public about malpractices prevailing in the market pertaining to company’s products, infringement of trade markets etc.
• Publication of various notices.
• Recruitment of personnel.
• Launch of an IPO (Initial public offering).
• Invitation of tenders.
• Appointment of distributors.
• Increase in prices.
• Hike in prices.

Advertisement Vs. Publicity:

• Sometimes the term “Publicity” is used synonymously with ‘Advertisement’.
• Publicity is a broader term than Advertisement.
• Advertisement is a form or a type of publicity.

Essentials of Advertisement:

• Exposure: Audience must be exposed to the communication
• Perceiverance: Audience must perceive correctly what action is desired by the communicator.
• Retention: Audience must retain the message sought to be communicated.
• Action: Audience must act on the advertisement.

Essential Components of Various Advertisements:
In the table given below, an attempt has been made to highlight the emphasize area’ of advertisement for different purposes:

Advertisement Today:
1. Handbills
2. Leaflets
3. Pamphlets
4. Brochures

Modern methods includes:
1. Newspapers.
2. Television

3. Internet

• 3/4,h of the Newspaper is devoted to Advertisements.
• It is essential that advertisement should serve it purpose.
• Advertisements should be prepared, printed or aired through the right media at the right time.

Classifieds:

• Classifieds are printed in a newspaper under heading such as matrimonial.’
• Classifieds are charged according to the no. of words present in the advertisement.
• Drafting of classified is similar to telegraphic message.
• The rest of grammar are relaxed in order to keep the matter brief.
• Specimen of a classified

Situation vacant/wanted/for sale /Business Offers

………………………………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………………..
Contact (Address/Box No) Ph …………………………………………………………………………………………………………………………………………..
Fax ………………………………………

Public Notices:
Sometimes it becomes essential to issue public notice because it is statutorily required or public has to be informed about the companies activities.

(Letter Head)
Public Notice

Notice is
hereby …………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………
sd/-
Company Secretary

Date: DD/MM/YYYY

Appointments:

• Senior-level positions are generally advertised in appointment pages or inbox. So are prized products & services.
• The space is measured in columns/cms.
• The charges vary according to circulation and goodwill of newspaper.
• Advertising agencies vie. for corporate advertising accounts, which may run in crores of rupees.

(Letter Head)

“Required ……………………………………………………………………………………………………………………………………………………………………….
…………………………………………………………………………………………………………………………………………………………………………………………..
Apply immediately to Box No.2345, HT, New De-101112

Accounts Correspondence:

• A commercial transaction is a complex process which start from the stage of ordering of goods to the delivery of finished goods to the customer.
• Most of the companies follow SCM (Supply Chain Management) which helps the company in making the transaction, cost-effective and efficient.

Invoice:

• It is the document which gives full information of the goods being shipped.
• Invoice is prepared by the exporter and sent to the importer.

Invoice serves the following purposes:
→ Invoice provides an accurate description of goods being sent and of prices to enable the buyer to verify them.
→ Invoice states the total amount payable by the buyer.
→ Regular customer is entered into the books of account who pays at the end of the credit period.
→ It transfers ownership of goods and helps in calculation of duties and taxes payable on them.
→ Invoice is a valid legal document. It can be used when dispute arises regarding payment.

Proforma Invoice:

• Proforma invoice is different from invoice for the sake of form only.
• Proforma is neither entered into books nor charged to the accounts of recipients.

Proforma invoice is used for following purposes :

• It is used as a quotation
• It is used as demand for payment from a new customer or to the person with whom the company does not have any credit facility.
• It gives detail of goods and amount of goods sent for approval.
• It helps or enable the company for calculation of duties and taxes payable.

Delivery Challan:

• It give details of the goods sent
• It is issued by stores department
• It includes sale value of goods and do not require covering letter.

Statement of Accounts:

• Regular buyer most of the times prefer acceptance of material on credit
• Regular buyer sometimes prefer to accept goods “on Approval”.
• Statement of Account shows the opening balance, details of transaction and closing balance.
• Whole accounting system is based on double-entry bookkeeping system. It was originated by Luca Pacioli, an Italian genius monk in his book names Summa de Arithmetic in the year 1494.
• Statement of accounts do not need covering letter.

Format of Statement of Account:

Credit / Debit Note:

• Credit Note: A document sent by a seller to a buyer to rectify an error of overcharge in an invoice, or to allow credit for goods returned. It is entered in the books of account.
• DebIt Note: A note sent by a seller to buyer to rectify an undercharge in the original invoice. It s in the nature of a supplementary invoice.
• In the Credit / Debit Note the abbreviation E & 0E means error and omission excepted.
• Credit and Debit Note is exchanged between the parties to adjust the amount of differences.
• Credit / Debit Note is enclosed with the letter along with it.

The different types of letter endorsed aro:-

• Letter regarding details of error.
• Letter regarding returning of goods.
• Letter for refusing to issue credit note.

Specimen letter:
Dear Sir,
We regret to inform ……………………………………………………………………………………………………………………………………………………….
……………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………. Body of the letter ………………………………………………………………………………
We are enclosing a Debit Note of ₹ XXXX /- to cover the amount of difference. We regret the inconvenience caused to you Your faithfully,
R. K Singh

Collection Letters:

• Collection of amount is the most important job for the organisation.
• Good organisation understands the importance of making payment on time without any delay. It leads to creation of goodwill.
• It will be foolishness to write the first collection letter in an angry tone. If the party does not pay on time then, firmer tone should be adopted in subsequent letters.
• Collecting payment is most difficult part of business.
• Collection letter must be written cautiously.

Reminder Letter
Specimen :
Dear Sir,
Please refer to our statement for the period ending December, 20xx, which was mailed to you on xx January 20xx, and a telephonic reminder later. We regret to inform that we have still not received the payment.
We shall be grateful if you remit the outstanding amount on the receipt of this letter.
Yours faithfully,
R. K Singh

Defaulter:
To challenge the defaulter one must follow some steps

• Suspension of supplies
• Cancellation of credit
• A stricter tone and style may be justifiably used against them

Final reminder:
A letter in stricter tone and style is written for final reminder.

Explaining Delays:
In order to seek an extension of time from the supplier, customer writes a letter to explain the reasons for delay.

Banking Correspondence:
Business without banking is impossible/unimaginable.
Company starts its operations by opening a current A/c
Facilities provided by bank to the companies include

• Overdraft limit
• Term loan
• Credit References
• Depository services etc.

Company operates the account through one or more authorised signatories who may be changed by board of directors.

Change of Signatories:
A letter is written to change the no. of signatories or change the person holding the authorised signatory.

Insurance Correspondence:

• Insurance is a contract between the company, called the insurer and the client known as insured.
• Calculation of insurance is made on annual basis. Flexible payments plans are offered for the sake of convenience.
• Premium is calculated in percentage terms, e.g. 2 paise per hundred rupees for fire Insurance.

Various letters are drafted by policyholder and by insurance company such as:-

• A letter for policy renewal
• A letter for roll and void policies
• A letter for reporting loss

Specimen Letter by Insurance Company

[Letter Head]

(Name)
(Address)
Dear (Name)
Policy No.
Introduction ……………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………….. Body …………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………….
………………………………………………………………………………………………………………………………………………………………………………………….
………………………………………………………………………… Conclusion …………………………………………………………………………………………..
Yours faithfully
xxxx sd/-
(Past)

Provident Fund Correspondence:

• All business entities employing more than twenty persons are covered under the Employee Provident Fund and Miscellaneous Provisions Act, 1952.
• The employee contributes a total of 12% of Basic Salary + Dearness Allowances to the funds established under the schemes prescribed by the Central Government.
• A company failing to deposit the money may receive a show-cause notice from the provident fund commissioner’s office.
• A grace period of 5 days is allowed.

[Reply to Show Cause Notice]

To
The Regional PF Commission.
Employee’s Provident Fund,
60, Skylark Building,
Nehru Place,
New Delhi.
Dear Sir,
Return for Nov 2012 / Code No. DL/3523
……………………………………………………………………………………………………………………………………………………… Introduction
………………………………………………………………………………………………………………………………………………………………………….
Specimen letter for change of signatories :
Dear Sir,
The Board of Directors of our company decided at a meeting held on 6 February 2012 that our current account no. 6619 with you will be operated jointly by the Managing Director and Chief Account Officer with immediate effect.

A certified copy of the resolution of the Board and the specimen signatures of the authorised signatories are enclosed.
Please acknowledge the receipt of this instruction.
Yours faithfully,
R. K Singh

Stop Payment:

• During the business hours a company mails large number of cheques and other instruments.
• If the payee reports that he has not received the cheque yet, It is advisable to convey to bank promptly for the stop payments of cheque.

Overdraft:
Sometimes, companies faces the problem of insufficient cash. To cope up with this problem companies opt for overdraft facility.

Specimen :
Dear Sir,

Current Account No. 2332

We regret ……………………………………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………. Introduction …………………………………………………………………………………
…………………………………………………………………………………….. Body ……………………………………………………………………………………………..
Please arrange immediate credit to clear the overdraft. If you find working capital is inadequate, we advice you to negotiate a higher OD limit.
Yours faithfully,
R. K Singh

Term loan:
Fixed term loan are usually secured against any fixed asset. Sometimes fixed-term loan take time to sanction, so a letter is dispatched in the event of delay.

Specimen :
…………………………………………………………………………………………………………………………………………………………………………………………………….
……………………………………………………………………………………………………….. Body ………………………………………………………………………………..
……………………………………………………………………. Conclusion ………………………………………………………………………………………………………..
…………………………………………………………………………………………………………………………………………………………………………………………………….
Yours faithfully,
R. K Singh

Correspondence With Postal Activities:
Nowadays, correspondence with postal department has reduced due to the increased use of email and private courier services.
Facilities like Post Box number are continued to be used by large corporate houses.

Post Box Facility
The Post Master
Parliament Street Post Office
New Delhi -110001
DD/MM/YYYY
Dear Sir,
Sub: Request For Post Box Facility
……………………………………………………………………………… Introduction ………………………………………………………………………………..
………………………………………………………………………………. Body ……………………………………………………………………………………………
……………………………………………………………………………….. Conclusion ……………………………………………………………………………….
Please allow a Post Box number and oblige.
We thank you in anticipation
R. K Singh

Correspondence With it and Corporates:
Nowadays companies use various communication system to communicate such as fax, PBX, Answering Machines etc.
he old telephone one still remain indispensable and still used by large corporate houses.

An application for reconnection of phone
To
The SDO
Andheri (East Zone)
MTNL Mumbai Dear Sir,

Sub: Reconnection of Phone No. xxxxx

……………………………………………………………………… Body ……………………………………………………………………………………………………………..
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………………….
You are requested to reconnect phone immediately as we are facing lots of inconveniences.
We thank you in anticipation
Yours faithfully,
R. K Singh

Nature of Management and its Process MCQ Questions

1. A job application is similar to
(a) Sales letter
(b) Purchase letter
(c) Letter of order
(d) None of the above
Answer:
(a) Sales letter.

2. A sales letter drafted for a large number of people is known as
(a) Sales Order
(b) Sales circular
(c) Sales manual
(d) Sales Enquiry
Answer:
(b) Sales circular

3. Which of the following is applicable in case of Telegram.
(a) The message must be detailed
(b) Normal grammar and punctuation must always be followed.
(c) Time should be written according to twenty-four-hour clock
(d) Block letter must not be used
Answer:
(c) Time should be written according to twenty-four-hour clock.

4. Office orders have a format similar to that of:
(a) Press Release
(b) Representation
(c) Advertisement
(d) Memorandum
Answer:
(d) Memorandum.

5. Which of the following is not a form of intra-organisational communication.
(a) Representation
(b) Memorandum
(c) Press release
(d) Office Notes
Answer:
(c) Press release.

6. Difference between a sales letter and sales circular is
(a) Subtitle
(b) Salutation
(c) Introduction
(d) Conclusion
Answer:
(a) Subtitle.

7. Which of the following features specifically does not relate to advertisement
(a) Inviting tender
(b) Hike in prices
(c) Placing an order
(d) Recruitment of personnel
Answer:
(c) Placing an order.

8. Which of the following is not the heading of a classified?
(a) Business offer
(b) Situation vacant
(c) Situation wanted
(d) Situation sale
Answer:
(d) Situation sale.

9. What does OEM stands for?
(a) Outstated Equipment Manufactures
(b) Original Equipment Manufactures
(c) Ordinary Equipment Manufactures
(d) None of the above
Answer:
(b) Original Equipment Manufactures.

10. Which type of letter is not goodwill letter.
(a) Thank you letter
(b) Condolence letter
(c) Letter of complaint
(d) Letter of sympathy
Answer:
(c) Letter of complaint

11. Which of these terms and conditions are not present in the letter appointment?
(a) Place of operation
(b) Remuneration
(c) Probation
(d) None of these
Answer:
(d) None of these

12. Obituary notice is written to provide a news of:
(a) Some body’s death
(b) Somebody’s promotion
(c) Somebody’s termination
(d) None of these
Answer:
(a) Somebody’s death

13. The first step of a commercial transaction is ……………………… .
(a) Making an order
(b) Making an enquiry
(c) Giving quotations
(d) None of these
Answer:
(b) Making an enquiry

14. In case of tender notices, EMD stands for:
(a) Electronic monetary deposit
(b) Earnest money department
(c) Earnest money division
(d) Earnest money deposit
Answer:
(d) Earnest money deposit.

15. Normally, in tender notices EMD is …………………… of estimated value.
(a) 2%
(b) 3%
(c) 4%
(d) 5%
Answer:
(a) 2%

16. In case of tenders, contracts s given based on the principle of:
(a) Lowest bid get the contract
(b) will get the contract
(c) Best bid wifl et the contract
(d) None of the above
Answer:
(a) Lowest bid get the contract

17. In case of order letters which of these is not placed under the head of terms and conditions:
(a) Price
(b) Discount
(c) Credit terms
(d) Despatch
Answer:
(c) Credit terms.

18. What does “D” stands for in ADIDAS plan?
(a) Despatch
(b) Discount
(c) Delivery
(d) Desire
Answer:
(d) Desire

19. …………………………………. is the biggest example of paid communication.
(a) Advertisement
(b) Publicity
(c) Letters
(d) All of these
Answer:
(a) Advertisement

20. Which of these is an essential feature required for advertisement?
(a) Exposure
(b) Perseverance
(c) Retention
(d) All of these
Answer:
(d) All of these

21. Which of these is not a traditional method of approaching customers?
(a) Handbills
(b) Leaflets
(c) Brochures
(d) Personal mails
Answer:
(d) Personal mails.

22. …………………………………… deals with all matters relating to staffing right from recruitment to retrenchment.
(a) Personnel department
(b) Marketing department
(c) Directing department
(d) Controlling department
Answer:
(a) Personnel department.

23. ………………………….. is a record of one’s personal and professional detail.
(a) Curriculum Vitae
(b) Bio-data
(c) Data Sheet
(d) All of the above.
Answer:
(d) All of the above.

24. …………………………………………… is based on emphasizing the skills and talents of the applicant
(a) Functional Experience
(b) Chronological Experience
(c) Both (a) & (b)
(d) None of the above.
Answer:
(a) Functional Experience

25. …………………………………… should contain information about the position applied for date, time and venue.
(a) Thank you letter
(b) Interview letter
(c) Congratulatory letter
(d) Condolence letter.
Answer:
(b) Interview letter

26. ………………………………………. is a combination of both
(a) Data Sheet
(b) Circulum vitae
(c) Both (a) & (b)
(d) None.
Answer:
(b) Circulum vitae

27. Initial intimation of appointment may be given through a brief ………………….. .
(a) Sympathy letter
(b) Congratulatory letter
(c) Provisional letter
(d) Thank you letter.
Answer:
(c) Provisional letter

28. Good News Letter are also called as ……………………… .
(a) Indirect approach letter
(b) Direct approach letter
(c) Both (a) & (b)
(d) None of the above
Answer:
(b) Direct approach letter

29. The first step of a commercial transaction is to make
(a) Replies
(b) Estimates
(c) Enquiries
(d) None of the above.
Answer:
(c) Enquiries

30. ………………………. may use technical jargon
(a) Replies
(b) Enquiry
(c) Both (a) & (b)
(d) Industrial Enquiry.
Answer:
(d) Industrial Enquiry.

31. What does CIF stands for –
(a) Cost Insurance & Free
(b) Call Insurance & Freight
(c) Cost Insurance & Freight
(d) None of the above.
Answer:
(c) Cost Insurance & Freight

32. ………………………………………. bid gets the contract
(a) Lowest
(b) Highest
(c) Both (a) & (b)
(d) None of the above.
Answer:
(a) Lowest

33. …………………….. is used to identify contractors who would be allowed to tender for certain contracts.
(a) Tender
(b) Estimate
(c) Pre-qualification
(d) Reply.
Answer:
(c) Pre-qualification

34. ……………………. letter saves time and effort.
(a) Ready-to-send
(b) Thank you
(c) Sympathy
(d) Condolence.
Answer:
(a) Ready-to-send.

35. Select which from the following is not a type of advertisement.
(a) Hike in price
(b) Inviting tenders
(c) Stunts performed by actors
(d) Recruitment of personnel
Answer:
(c) Stunts performed by actors

36. What does not affect sales demand?
(a) Attention
(b) Attraction
(c) Interest
(d) Desire.
Answer:
(b) Attraction

37. One word for a sentence “fail to fulfil a promise”.
(a) Burdensome
(b) Revenge
(c) Penury
(d) Tedious.
Answer:
(b) Revenge

38. In case of letter of enquiry …………………………… may also be given, especially in case the intention is to have credit and when it is the first transaction,
(a) Name of the company
(b) Credit reference
(c) Phone No
(d) None of the above.
Answer:
(b) Credit reference

39. What is the full form of CNC?
(a) Computerized and Numerically Counted
(b) Computerized and Numerically Claimed
(c) Computerized and Numerically Controlled
(d) None of the above.
Answer:
(c) Computerized and Numerically Controlled

40. The party getting the contract has to replace it with performance guarantees of up to …………………. of the estimated value and experience certificate.
(a) 20
(b) 25
(c) 30
(d) 10.
Answer:
(d) 10.

41. ……………………………… only mentions the quantity and type of goods.
(a) Invoice
(b) Performa Invoice
(c) Delivery Challan
(d) None of the above
Answer:
(c) Delivery Challan

42. A note sent by a seller to buyer to rectify an undercharge in the original invoice
(a) Credit note
(b) Debit Note
(c) Warrant
(d) None of the above
Answer:
(b) Debit Note.

43. Which of the following is not a banking service:
(a) Policy Renewal
(b) Overdraft limit
(c) Term loan
(d) Status Enquiries
Answer:
(a) Policy Renewal.

44. ……………………………….. connect the different Branches of an organisation in a Private, dedicated communication network.
(a) ISDN
(b) Post box of facility
(c) VSAT
(d) AAR
Answer:
(c) VSAT

45. The following is an example of which type of letter.
Dear Sir.
Please refer to our statement of a/c for the period ending Dec 2011, which was Mailed to you on 5 Jan , 2012 and the telephonic reminder letter. We regret to enforce that we have still not received that Payment.
We will agree that delayed payments may affect schedule and cause avoidable inconvenience to both the parties.
We shall be grateful if you remit the outstanding amount on the receipt of this letter.
(a) Collection Letter
(b) Reminder Letter
(c) Statement of Account
(d) Final Reminder
Answer:
(b) Reminder Letter

46. A commercial transaction is a ……………………………….. process.
(a) Simple
(b) Chain
(c) Complex
(d) None of the above
Answer:
(c) Complex

47. The Policy may be declared …………………………….. if the Insurer detects under insurance.
(a) Policy renewal
(b) Null and void Policies
(c) Overdraft limit
(d) None
Answer:
(b) Null and void Policies

48. Which of the following is a type of insurance correspondence letter?
(a) Reporting loss
(b) Overdraft limit
(c) Both (a) & (b)
(d) C Form
Answer:
(a) Reporting loss.

49. The first collection letter should be written in ………………….. manner
(a) Firm
(b) Polite
(c) Strict
(d) None of the above.
Answer:
(b) Polite.

50. The ………………………. is calculated in percentage term say 2 paise per hundred rupees for fire insurance.
(a) Restricted loss
(b) Sum Assured
(c) Maturity value
(d) Premium
Answer:
(d) Premium.

51. A company may not charge the full price of shares but recover in instalments that are known as “…………………………..”.
(a) First call
(b) Second call
(c) Final call
(d) Call
Answer:
(d) Call

52. “Enterprise are paid to create wealth not to control cost” is said by
(a) John Keats
(b) Peter F Drucker
(c) Charles Darwin
(d) AL Bowley
Answer:
(b) Peter F Drucker.

53. It is advisable to send a copy of ……………………… showing arrears of payment to the companies before sending the collection letter.
(a) Statement of Account
(b) Statement of Affair
(c) Statement showing Balance Sheet
(d) All of the above
Answer:
(a) Statement of Account.

54. Which feature of banking services should be used when the payee reports that he has not received the instrument.
(a) Change of signatories
(b) Overdraft limit
(c) Status Enquiries
(d) Stop payment
Answer:
(d) Stop payment.

55. The term …………………. is used for the introduction of new technologies like CAM in manufacturing of existing products.
(a) Overdraft
(b) Loan
(c) Money order
(d) None
Answer:
(b) Loan.

56. Sanction letter is required in which type of loan?
(a) Term loan
(b) Overdraft
(c) Cash credit
(d) All of the above
Answer:
(d) All of the above.

57. ………………….. facility shall be used by corporate houses relating to postal department
(a) Letter posting
(b) Post Box facility
(c) Money order
(d) None of the above
Answer:
(b) Post Box facility

58. To challenge defaulter some steps should be followed like
(a) Suspension of supplies
(b) Cancellation of credit
(c) A stricter tone and style
(d) All of the above
Answer:
(d) All of the above.

59. Full form of AAR
(a) Against all risk
(b) All Against risk
(c) All against refund
(d) All Against recovery
Answer:
(a) Against all risk.

60. Full form of E & OE
(a) Error and Omission Eluded
(b) Error and Omission Excepted
(c) Error and Omission Eradicated
(d) Error and Omission Established
Answer:
(b) Error and Omission Excepted.

61. ……………………….. is the document which gives full information of the goods being Shipped and sent to the importer.
(a) Proforma invoice
(b) Delivery Challan
(c) Invoice
(d) Debit Note
Answer:
(c) Invoice

62. In which Legal Condition, a person or business has liabilities exceeding the assets and the debtor is unable to pay the amount.
(a) Winding up process
(b) Incorporation
(c) Bankruptcy
(d) None
Answer:
(c) Bankruptcy.

63. Proforma Invoice is used for which purposes:
(a) Helps the company for calculation of duties and taxes Payable
(b) Used as quotation
(c) Both (a) & (b)
(d) None of the above.
Answer:
(c) Both (a) & (b)

64. Accounting System is based on double-entry bookkeeping system. It was originated by in the year .
(a) John keats, 1496
(b) A. L. Bowley,1542
(c) Luca Pacioli, 1494
(d) Charles Darwin 1690
Answer:
(c) Luca Pacioli, 1494

65. Full form of SCM
(a) Sales Cost Management
(b) Supply Chain Management
(c) Supply Cost Management
(d) None of the above.
Answer:
(b) Supply Chain Management

66. A letter in stricter tone and style is written for ……………….. .
(a) Suspension
(b) Reminder Letter
(c) Cancellation
(d) Final Reminder.
Answer:
(d) Final Reminder.

67. Insurance is a contract between the company, called the & the client known as ……………………………… .
(a) Contractor contractee
(b) Insurer, Insured
(c) Insured, Insurer
(d) None of the above.
Answer:
(b) Insurer, Insured.

68. Investors are expected to open to get their share certificate in the electronic forms.
(a) Current A/c
(b) Demat A/c
(c) Saving A/c
(d) Fixed A/c
Answer:
(b) Demat A/c.

69. Banking require letter writing for following service.
(a) Overdraft limit
(b) Dividend
(c) Postal authorities
(d) Policy renewal
Answer:
(a) Overdraft limit

70. The abbreviation ISDN stands for ………………………. .
(a) Integrated small digital network.
(b) International small display network.
(c) Integrated system digital network
(d) Integrated system display network.
Answer:
(c) Integrated system digital network

71. The word ‘resume’ is a …………………….. word.
(a) Latin
(b) Greek
(c) French
(d) None of these
Answer:
(c) French
The word ‘resume’ is a french word which is pronounced as rezoom-ay. It is a record of one’s professional as well as personal detail. A good resume should not be very long. One should not let it go beyond three pages. It may be enclosed with job application.

72. ‘Letter of sympathy’ is a part of –
(a) Inter – departmental communication
(b) Press Release
(c) Goodwill Letters
(d) None of the above
Answer:
(c) Goodwill Letters
Letter of Sympathy: It is important to share the pains of our friends and associate. A letter of sympathy is drafted to share the feeling of our colleagues, friends and associates. Therefore, letter of Sympathy is a part of goodwill letter.

73. Which one of the following is not purchase correspondence?
(a) Request for quote
(b) Tender Notice
(c) Purchase Order
(d) Goodwill Letter
Answer:
(d) Goodwill Letter:
Purchase Correspondence: Most of them think selling is a toughest job to do but purchase is also a tough job to do. Selling and purchase are interdependent.

Different types of Purchase correspondence are:

• Enquiries
• Replies
• Industrial Enquiries
• Replies to Industrial Enquiry
• Request for quote/Tender Notice
• Purchase order
• Tender Process

Therefore, Goodwill letter is not a part of purchase Correspondence.

74. Which one of the following documents is issued by the seller when goods are returned by the customer?
(a) Invoice
(b) Supplementary Invoice
(c) Proforma Invoice
(d) Credit Note
Answer:
(d) Credit Note:
Credit Note: A Document by a seller to a buyer to rectify an error of over change in an invoice; or to allow credit for goods returned. It is entered in the books of account.
Thus, credit note is a document issued by a seller when goods are returned by the customer.

75. Which one of the following methods is used frequently by an organisation to decide its strategic goals? ‘
(a) Group discussion
(b) Brainstorming
(c) Interview
(d) None of the above.
Answer:
(a) Group discussion:
Group Discussion is used frequently by an organisation to divide its strategic goal. Various Ideas by each level are brought up by the employees for the betterment of organisation.

76. Which one of the following is not true about a job interview?
(a) In a job interview, one needs to study about the job, the company and industry
(b) Memorise and rehearse the answers to the probable questions in the interview
(c) Reach at the interview venue about 10-15 minutes early
(d) Bring an extra copy of resume at the time of interview.
Answer:
(d) Bring an extra copy of resume at the time of interview:
It is not necessary for the candidate to bring the second copy of the resume as it is not required in job interview.

77. Organisations publish ……………………. when they have to procure goods and services on a large scale or get projects executed.
(a) Purchase requisition
(b) Tender Notice
(c) Purchase Order
(d) None of the above.
Answer:
(b) Tender Notice:
Organisations publish tender notices when they have to procure goods and services on a larger scale or get projects executed. They may be defined as invitations to submit bids to provide such goods/services at quoted prices and subject to stated conditions.

78. When goods are returned by the customer, which one of the following is issued to the customer for the value of goods returned?
(a) Debit Note
(b) Performa Invoice
(c) Invoice
(d) Credit Note.
Answer:
(d) Credit Note:
Credit Note is a document sent by seller to a buyer to rectify an error of overcharge in an invoice or to allow credit for goods returned. Thus, when goods are returned by the customer, credit note is issued to the customer for the value of goods returned.

79. A company operates its bank account only through –
(a) Shareholder
(b) Investors
(c) Persons authorized by the Board of Directors
(d) Company Secretary.
Answer:
(c) Persons authorized by the Board of Directors:
A company operates its bank A/c only through the persons authorized by the Board of Directors and who may even be changed by the Board of Directors.

80. ……………………… is neither entered into books of account nor charged to the account of the recipients.
(a) Delivery Challan
(b) Invoice
(c) Credit/Debit Note
(d) Proforma Invoice.
Answer:
(d) Proforma Invoice:
A proforma invoice is different in so far as it is for form’s sake only. It is neither entered into books nor charged to the account of the recipients.

81. Which of the following is a goodwill letter?
(a) Sympathy letter
(b) Obituary letter
(c) Thank you letter
(d) All of the above.
Answer:
(d) All of the above:
Types of Goodwill letters:

• Thank you letter
• Letters of Sympathy
• Obituary Notice
• Condolence letter

Thus, Option (d) i.e. all of the above is correct.

82. A job application does not contain which of the following?
(a) Your personal quality
(b) Your reason of removal from last job
(c) Your achievements
(d) None of the above.
Answer:
(d) None of the above:
Job application contains :

• Personal Quality
• Academic Qualification
• Additional Qualification
• References
• Experience or Achievement

Thus, option (d) is correct i.e. none of the above.

83. “We are pleased to inform you that you are shortlisted for an appointment in our company as soon as we can find a position in keeping with your qualifications and experience.” Which type of letter is this?
(a) Letter of appointment
(b) Short-listed candidate
(c) Letter of confirmation
(d) Goodwill letter.
Answer:
(b) Short-listed candidate:
Companies may shortlist candidates for absorption at a later date if they are unable to find a suitable position for them at the time of interview. In such cases, their details are stored in the data bank and a polite letter addressed to them. Thus, the give example is of short-listed candidate.

84. Which of the following is not a guideline for writing minutes?
(a) Record full text of motion
(b) Ensure each item has been recorded
(c) Ensure separate paragraph for each item
(d) Reorganisation of work
Answer:
(d) Reorganisation of work:
General Guidelines for writing minutes are as follows :

• Use separate paragraphs for each item.
• Record full text of motions.
• Language of minutes should be simple and precise.
• Ensuring that each item discussed in the meeting has been recorded.
• The secretary should go on taking notes during the meeting.
• Defamatory language, irrelevant point should not be recorded. Thus, Re-organisation of work is not a guideline for writing minutes.

85. A reply to enquiry letter must take care of:
(a) A reference to the date and number o’ the letter of enquiry
(b) All relevant information about goods, prices, discounts etc.
(c) Assurance of best service to the sender of the enquiry
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
A reply to enquiry letter must include:

• Clear reporting of kind & quantity of goods.
• Assurance of best service.
• Reply must not begin with refusal.
• Reply must be polite & expeditious.
• All relevant information must be stated clearly.

Hence, option (d) is correct.

86. A Company Secretary:
(a) Has nothing to do with the directors of the company
(b) Is never in touch with any government department
(c) Occupies an important place in a corporate set-up
(d) Does not have to correspond with the investors.
Answer:
(c) Occupies an important place in a corporate set-up:
A company secretary occupies an important place in a corporate setup. It is defined as per definition of key managerial personnel in Companies Act, 2013.

87. Which of the following statement about Goodwill letters is incorrect?
(a) It should not contain stereotyped phrases
(b) It may contain one’s sincere feelings
(c) It should be brief
(d) It should not be handwritten.
Answer:
(d) It should not be handwritten:
Goodwill letters features are as follows:
→Goodwill letter should be brief
→ No compulsion to write them
→ They should preferably be handwritten.
→ Should And contain stereotyped phases.
→Should be brief.

88. The abbreviation VSAT stands for:
(a) Video Shot Aperture Transmission
(b) Very Small Aperture Terminals
(c) Voice Sites Applicable Transmission
(d) Voice Server Applied Terminals.
Answer:
(b) The abbreviation VSAT stands for Very Small Aperture Terminals which connect the different branches of an organisation in a private, dedicated communication network

89. A correct statement about advertising is:
(a) It is a paid communication to the masses
(b) It is meant to impart information, develop attitudes and create needs
(c) It induces action beneficial to the advertiser
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
Advertising is mass paid communication, the ultimate purpose of which is to impart information, develop attitudes and induce action beneficial to the advertiser.

90. Which of the following statement is incorrect?
(a) An enquiry letter should be compact, straight forward and courteous
(b) An enquiry letter can be lengthy with repetitions
(c) A properly drafted enquiry letter can originate big business deals
(d) An enquiry letter should be drafted clearly.
Answer:
(b) An enquiry letter can be lengthy with repetitions:
While writing we should avoid lengthy and unnecessary statements and representations.

91. Thank you letters, congratulatory letters, letters of sympathy and condolence letter are the type of ………….. letters.
(a) Regret
(b) Order
(c) Goodwill
(d) Sales.
Answer:
(c) Goodwill:
Thank you letters, congratulatory letters, letters of sympathy and condolence letters are the type of Goodwill letters.

92. A true statement about Telegrams is:
(a) It cannot be sent to remote places
(b) It is a recent development in communication technology
(c) It is coded language to communicate
(d) It is very expensive.
Answer:
(b) It is a recent development in communication technology:
Words are changed into signals (codes) with the help of the More’s key and sent across countries and continents in a short time.

93. Choose the incorrect statement about securities:
(a) In order to use dematerialising facilities one has to open a demat account
(b) Change from electronic format to physical form is called re-materialisation
(c) Once you dematerialise your securities you cannot rematerialise
(d) Change from physical form to electronic format is called dematerialisation.
Answer:
(c) Once you dematerialise your securities you cannot rematerialise
Securities are being used in electronic or dematerialised form, however, re-conversion to physical form or rematerialisation is also possible.

94. Telex is used only for student text and are used for graphics, text etc:
(a) Partly true
(b) Partly false
(c) True
(d) False
Answer:
(c) True:
Telex machine only allow exchange of text and for graphics etc.

95. Goodwill letter is written in which tone?
(a) Formal tone
(b) Informal tone
(c) Both (a) and (b)
(d) None of the above
Answer:
(c) Both (a) and (b):
Goodwill letters are not mandatory but they are written in order to enhance the relation and increase the goodwill of the organisation. It should be brief and in informal tone.

96. We write a congratulatory letter, when:
(a) A friend, colleague or a business associate earns a promotion, recognition
(b) We want to send a message of felicitation
(c) Somebody has made us proud
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
We write a congratulatory letter when a friend colleague or a business earn a promotion, recognition, honour or an award. The achievement may be in the personal or professional arena we may send a message of felicitation and earn some precious goodwill in the process.

97. When reviewing resumes, all of the following are important to keep in mind except:
(a) Focus on the font and format
(b) Identify what the educational background of the candidate is in order to determine qualifications
(c) Do not make assumption based just on what is written
(d) Look for long unexplained gaps in between jobs.
Answer:
(c) Do not make assumption based just on what is written:
While reviewing resume, the things which are required to be kept in mind are focus on font/format, educational background, qualifications, unexplained gaps in between jobs except; making assumptions based just on what is written as there are many professional agencies which are just involved in these works as well as sometimes hiding factual informations.

98. Which of the following is a traditional method of advertising?
(a) SMS
(b) Internet
(c) Radio
(d) E-mails
Answer:
(c) Radio:
Radio is a traditional method of advertising. Advertising is frightfully expensive. Therefore, it is essential that the advertisement should serve its purpose. This method help the advertisement to be aired at the right time and at low cost.

99. Which of the following statement is incorrect?
(a) An enquiry letter should be compact, straight forward and courteous
(b) An enquiry letter should be drafted clearly
(c) An enquiry letter can be lengthy with repetitions
(d) A properly drafted enquiry letter can be big business deals.
Answer:
(c) An enquiry letter can be lengthy with repetitions:
An enquiry letter should be straightforward, compact and courteous. It should be brief and to the point, complete and correct. It should avoid lengthy and unnecessary statements and repetitions.

100. An incorrect statement about an invoice is:
(a) It is not a valid legal document
(b) It is sent to the importer
(c) It is entered in the accounts book of the importer
(d) It is prepared by the exporter.
Answer:
(a) It is not a valid legal document:
Invoice is a document which gives accurate description of the goods being sent and their prices to enable the buyer to check them. It is a valid legal document in case of a dispute regarding payment.

101. Choose the incorrect statement about the agenda of a meeting:
(a) Agenda is always circulated after the meeting
(b) When the Chairperson or Secretary want to keep the agenda secret, they do not circulate it
(c) Agenda should be sent to all members entitled to receive it
(d) An agenda is a document that outlines the discussion points of a forthcoming meeting.
Answer:
(a) Agenda is always circulated after the meeting:
Agenda is a document that outlines the contents of a forthcoming meeting. It is usually sent along with the notice of the meeting. Sometimes agenda is prepared after the circulation of a notice in order to enable the members to get any item included to discuss at the meeting.

102. In which of the following letters, a direct approach is recommended?
(a) Condolence letter
(b) Letter of sympathy
(c) Appointment letters
(d) Letter of rejection.
Answer:
(c) Appointment letters:
There are 2 types of letters:

1. Direct Approach
2. Indirect Approach

Direct Approach: Letters carrying positive news. Eg: Appointment letter, Promotion letter
Indirect Approach: Letters carrying unwelcomed news. Eg: Letters of Rejection.

103. Very often a sales letter does not have the following enclosed with it
(a) An advance draft
(b) Literature about the product
(c) Self-addressed reply envelop
(d) Forms seeking information about the customer.
Answer:
(a) An advance draft
Sales letter contains the following:

• Literature about the product
• Self-addressed reply envelop
• Forms seeking information about the customers.

104. A Company Secretary:
(a) Is never in touch with any government department
(b) Has nothing to do with the directors of the company
(c) Occupies an important place in a corporate set-up
(d) Does not have to correspond with the investors.
Answer:
(c) Occupies an important place in a corporate set-up
A company secretary occupies an important place in a corporate setup.

105. Choose the incorrect statement related to invoice:
(a) An invoice helps the regular customer to pay at the end of the credit period.
(b) An invoice helps a customer to enter the amount in his account book.
(c) It does not transfer the ownership.
(d) An invoice states the total amount payable.
Answer:
(c) It does not transfer the ownership.
Invoice may serve following purposes:

• Gives an accurate description of goods being sent and their prices enable the buyer to check them.
• States the total amount payable for the convenience of buyer
• Regular customers enter it in their account books and pay at the end of credit period
• Transfers ownership of goods and helps in calculation of taxes payable on them.

106. A telephone screening interview would be most suitable if you were recruiting for:
(a) An assembly worker
(b) A data entry clerk
(c) A receptionist
(d) A dental assistant.
Answer:
(c) A receptionist:
An assembly worker, a data entry clerk and a dental assistant are all engaged in practical skill-based employment. However, for a receptionist, the way of speaking, fluency and tone is to be specifically judged. Thus, telephone screening interview would suit.

107. A correct statement about advertising is:
(a) It is a paid communication to masses.
(b) It is meant to impart information, develop attitudes and create needs.
(c) It includes action beneficial to the advertiser.
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
It is difficult to imagine today’s world without advertising. Three-fourths of a newspaper is devoted to advertisements of various kinds. Television programs are interrupted at frequent intervals to telecast commercials. On the internet, one finds goods and services being advertised on home pages of different search engines and websites. Thus, Advertising is a paid communication, for the masses. Its ultimate purpose is to impart information, develop attitudes, create needs and induce action beneficial to the advertiser.

108. …………………………… can act as liaison between the community on one hand and government on the other.
(a) Consumers association
(b) Employee association
(c) Trade unions
(d) None of the above.
Answer:
(d) None of the above:
A liaison officer is a person who liaises between two organizations to communicate and coordinate their activities. Generally, liaison officers are used to achieve the best utilization of resources or employment of services of one organization by another. Liaison officers often provide technical or subject matter expertise of their parent organization. Usually, an organization embeds a liaison officer into another organization to provide face-to-face coordination. Thus, none of the above liaisons between community and the government.

109. Which of the following statements should be kept in mind while preparing a resume:
(a) Do not include the skills you can offer
(b) Include the job title you are seeking and the skills you can offer
(c) Be general in your career objectives
(d) Include information about your family.
Answer:
(c) Be general in your career objectives:
While resume contains most of factual information about the applicant, the application or the covering letter reveals the profile of the applicant. If it is cleverly drafted, it may increase the chances of crossing the first hurdle. Thus, your resume should mention career goals and specific job objectives.

110. Choose the correct option:
(a) A debenture is an interest yielding loan.
(b) A debenture cannot be converted into equity shares.
(c) The right shares can be allotted to anyone.
(d) A company sometimes allots bonus shares to its shareholders even if it runs into losses.
Answer:
(a) A debenture is an interest yielding loan:
Public investment in a company is generally in the form of shares, debentures and deposits. Anyone can participate in the capital of a company through equity shares. The return on shares depends on the profitability of the company and is in the form of dividend. A debenture is an interest-yielding loan but may be partly or fully convertible into equity shares. The Rights Shares are allotted only to the existing shareholders of the company but they have to be paid for. The company may also part with profits in the form of Bonus shares to the existing shareholders.

111. Reputed associate of a leading foreign bank requires smart graduates with good communication skills for hard-core marking. Walk-in-interview is between 12 noon to 5 pm on February 5th at Hotel Hilton, Connaught Circus, New Delhi. This is an example of:
(a) Business Offers
(b) Situations Vacant
(c) Situation wanted
(d) Public Notice
Answer:
(b) Situations Vacant
The given classified advertisement is the example of situation vacant.

112. Which of the following statement about complaint letters is incorrect?
(a) A bona fjde complaint can be made after a passage of time
(b) A complaint should be based on factual information
(c) A dissatisfied customer has a right to lodge a complaint
(d) It is inappropriate to assume at the beginning that the seller alone is art fault.
Answer:
(a) The Statement a is incorrect- A Bonafide complaint should be made without delay since the passage of time complicates the matter.

113. Which of the following is not an essential part of a job resume?
(a) Address
(b) Education
(c) Work experience
(d) Food habits
Answer:
(d) Food habit is not an essential part of Resume.

114. Which one of the following is not true about a job interview?
(a) In a job interview, one needs to study about the job, the company and industry
(b) Memorise and rehearse the answers to the probable questions in the interview
(c) Reach at the interview venue about 10-15 minutes early
(d) Bring an extra copy of resume at the time of interview.
Answer:
(b) Memorise and rehearse the answers to the probable questions in the interview.

115. Which of the following is correct about office notes?
(i) Office notes are a form of internal communication between two different departments
(ii) Office notes are put up by sections or departments to higher authorities
(iii) The actual layout of the office note is same for all the companies. The Correct option is:
(a) (i) and (ii) only
(b) (ii) and (iii) only
(c) (i) and (iii) only
(d) All of the above.
Answer:
(a) (i) and (ii) only
Office notes are a form of internal communication. It is a communication between two different departments.

116. Which one of the following general rules is not applicable when composing a telegram?
(a) Block letters must be used as for as possible
(b) Sentences are to be divided by the word ‘STOP’
(c) The message must be brief and clear
(d) Normal grammar and punctuation must not be ignored.
Answer:
(d) Normal grammar and punctuation must not be ignored:
Block letters must be used as for as possible, is not applicable when composing a telegram.

117. Which one of the following is a type of goodwill letter?
(a) Letter of sympathy
(b) Office Order
(c) Thank you Order
(d) None of these
Answer:
(c) Thank you Order
Types of Goodwill letter:

• Thank you letters
• Congratulatory letters
• Letter of Sympathy
• Condolence letters
• Obituary Notices.

118. Resume for job should be:
(a) Career goals and job objective;
(b) Your adequate knowledge about the company being approached
(c) Both (a) and (b)
(d) None of these.
Answer:
(d) None of these:
Resume: contain following details:

1. Personal Particulars
2. Academic Particulars
3. Additional Qualification
4. Experience
5. Reference.

119. Organisations publish ………………….. when they have to procure goods and services an a large scale or get projects executed.
(a) Purchase requisition
(b) Tender notice
(c) Purchase order
(d) None of the above.
Answer:
(b) Tender notice:
Organisations publish ‘Tender Notice’ when they have to procure goods and services on a large scale or get projects executed.

120. …………………… is neither entered into books of account nor charged to the account of the recipients.
(a) Delivery Challan
(b) Invoice
(c) Credit / Debit Note
(d) Proforma Invoice
Answer:
(d) Proforma Invoice:
‘Proforma Invoice’ is the invoice or a type of papers note which is signed by consigner to the consignee and is neither entered into books of account nor changed to the account of the recipients.

121. …………………… are made in order to voice a grievance and to secure a relief.
(a) Business Communication
(b) Invoice
(c) Public Notices
(d) Representations.
Answer:
(d) Representations:
Representations are made in order to voice a grievance and to secure a relief.

122. When an organisation needs to share Important Information with members of general public, it drafts a –
(a) Public Notice
(b) Office Memorandum
(c) Agreement
(d) Representation.
Answer:
(a) Public Notice:
Public notice is the medium which is used by the organisation when an information is needed to be shared to a large no. of members within the general public.

123. A good press release should not be –
(a) Factual
(b) Lengthy
(c) News value
(d) Format based.
Answer:
(b) Lengthy:
A good press release should not be lengthy.
It should be –
– Brief
– Factual
– News value
– Format based.

124. When goods are returned by the customer, which one of the following is issued to the customer for the value of goods returned?
(a) Debit note
(b) Performa Invoice
(c) Invoice
(d) Credit note
Answer:
(d) Credit note:
When goods are returned by the customer credit note is issued to the customer for the value of goods returned.

125. AIDAS is a abbreviation of:
(a) Attention, Interest, Desire, Action, Satisfaction.
(b) Active, Interest, Desire, Ambition, Satisfaction.
(c) Both of above
(d) None of above.
Answer:
(a) Attention, Interest, Desire, Action, Satisfaction:
Effective sales writing demands following what Is known as the ‘AIDAS’ plan which stands for Attention, Interest, Desire, Action, and Satisfaction.

126. Types of goodwill letters
(a) Letter of sympathy
(b) Condolence letter
(c) Obituary letter
(d) All of above.
Answer:
(d) All of above.
Every business letter should be a goodwill letter.
They are classified as under –
– Thank you letters
– Congratulatory letters
– Letter of sympathy
– Condolence letters
– Obituary Notices.

127. It is neither entered into books nor charged to the account of recipient?
(a) Invoice
(b) Performa invoice
(c) Proforma Invoice
(d) Statement of Accounts.
Answer:
(c) Proforma Invoice:
A proforma invoice is different insofar as II is for the sake of form only. It is neither entered into books nor charged to the account of the recipients.

CS Foundation Business Management Ethics and Entrepreneurship Notes