Business Organization and Record Management Flashcards

Flashcards covering factors of business organization choice, the role of computers in record management, and the principles of electronic and traditional filing systems.

Joint stock company

A form of business owned by shareholders but controlled by professional managers, characterized by low flexibility and the separation of ownership and management.

Secrecy in Sole Trading

It is easy to maintain business secrecy in this form as there is no need to publish financial statements.

Audit Requirements

Joint stock companies and cooperatives are required by law to publish audited financial statements, making secrecy difficult.

Continuity

The stability of a business form; joint stock companies and cooperatives remain stable despite the death of members, while sole trading and partnerships may close.

Government Regulations

Factors affecting business choice; sole trading and partnerships require minimum regulations, while companies and cooperatives are subject to heavy regulations for establishment and closure.

Taxation Liability

Tax burden which is high for companies (corporate income tax), low for sole trading and partnerships, and lowest or exempt for specified cooperatives.

Flexibility

The ability to change a business; sole trading and partnerships provide higher flexibility, while companies and cooperatives require more formal formalities for changes.

Nature and Size of Business

A choice factor where sole proprietorship is appropriate for small shops/restaurants, while joint stock companies are for large-scale manufacturing, banks, or airlines.

Capital Requirement

Small capital suits sole trading/partnership; large capital (raised via share issues to the public) requires a joint stock company.

Risk and Return in Sole Trading

The risk is high due to unlimited liability, but the owner receives all the profits of the business.

Risk and Return in a Company

The risk is low as liability is limited, and profit is shared as dividends and bonus shares.

Computer

A fast electronic device that processes input data according to instructions from programmers/users to provide desired information.

Processing Speed

A computer characteristic capable of processing millions of instructions per second.

Diligence

The ability of a machine to perform millions of calculations efficiently without tiredness or boredom.

High Memory

A computer's capacity to store millions of data and instructions that can be retrieved and recalled even after many years.

Information Security (Computer)

Maintained through strong backup systems and control systems like passwords and official document security.

Electronic File Management

The practice of importing, storing, and managing documents and images in computer files, including scanning and digitalizing files.

Demerits of Electronic File Management

Includes being very expensive for hardware/software, the need for regular maintenance, training costs, and risks from viruses or hackers.

Metadata

Relevant and accurate data used to populate documents for easier and faster file searches.

Housekeeping (Electronic)

Regular practices performed to avoid information clutter in electronic systems.

Filing

A systematic process of classifying, storing, and preserving written records (letters, contracts, vouchers, etc.) in proper files or cabinets.

Classification Order

Documents can be arranged in alphabetical, numerical, geographical, subject wise, or chronological order.

Safety in Filing

Protection against possible loss or damage from dust, insects, rats, fire, and theft.

Evidence in Filing

Past records that can be presented in court to settle misunderstandings and disputes between parties.

Planning Information

Data provided by filing (such as production, sales, or financial position) used to make future plans and policies.