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A1
It is a description of property or a individual that is in the best condition.
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Abandonment
Abandonment in accounting terms concern with the full retirement of a fixed asset after it is removed from service. There are certain legal applications, abandonment of property is the giving up of all control over it with the intention of relinquishing all claim to it. Loss of property is involuntary, abandonment is a voluntary act. When used in connection with duty or responsibility, abandonment is syonnymous with repudiation.
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Above the Line
1. Above the line denoting entries above the horizontal line on a company’s profit and loss account that differes the entries that establish the profit (or loss) from the entries that show how the profit is distributed. 2. It denotes advertising expenditure on mass media advertising, including press, television, radio, and posters. It is regarded as all advertising expenditure on which a commission is payable to an advertising agency. 3. It denotes for transactions concerned with revenue, as opposed to capital, in national accounts.
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Absorption Costing
The method of costing products or activities by taking into account the total costs incurred in producing the product or service, however remote. It assure that full costs are recovered provided that goods or services can always be sold at the price implied by full cost pricing. However, if sales are lost due to the high sales price opportunities may be lost of making some contribution to overheads.
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Accepting House
Accepting House in an organization specializing in accepting or guaranteeing bills of exchange. A fee is charges for guaranteeing payment, enabling the bill to be discounted at special rates on the money market. The slope in the use of bills of exchange has forced the accepting houses to widen their fiscal activities; many of them have returned to their original function of merchant banking.
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Acid Test
It means the ratio of an enterprise’s current assets minus inventories to its current liabilities. One of certain factors used by credit analysts to judge an enterprise’s financial position. It is also called as the quick ratio.
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Acquisition Accounting
This is an accounting procedures adopted when one company is taken over by another. It often involves disputed issues as to the way in which goodwill is to be treated.
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Acquisitive Need
It means a motivational factor; the desire to possess or hoard material possessions such as clothing, money, property, fancy automobiles and clothing. It s objects are often those that are esteemed by the individual s societal affiliations.
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Ad Valorem Subsidy
It is a fixed percentage subsidy granted to process of commodities as a form of fiscal aid or relief from handship resulting from economic conditions beyond the control of the producers. It is calculated on the basis of the current or prevailing market value of the commodity.
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Adverse Selection
Adverse Selection refers to the insuring of a group of risks that represents an above average expectation of loss. Also, the tendency of poor risks to seek insurance.
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Affiliation
It is a connection existing between a holding or parent company and its subsidiary, or between two corporations or other organizations owned or controlled by a third.
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Alienation Clause
It is an special type of acceleration clause which requires payment of an entire loan balance upon sale or other transfer of title to real property.
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Amortize
Amortize means to write off all or a part of the cost of an asset; to be depreciated or deplete. Also, to retire a debt over a period of years.
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Anchor Lease
It is a lease, useually favorable, granted to a huge or well known retail business in order to attract the public to an area such as a shopping center.
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Anticipatory Repudiation
Anticipatory Repudiation is a breach of contract, it occur when a buyer of real estate informs the seller before closing escrow that he does not plan to complete the transaction.
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Antidumping Tariff
Antidumping Tariff is a tariff which is applied by a government to demoralize market dumping of imported goods intended for sale in the importing country at prices significantly below those charged for similar goods produced in the country of import.
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Arbitrage
It is a technique used to take advantage of differences in market prices for shares of stock. If, for example, WXR stock can be bought in New York for $ 10 a share and sold in London at $ 10.50, an arbitrageur may simultaneously purchase WXR stock in New York and sell the same amount in London, making a profit of 50 cents a share, less expenses. This technique is also applicable to the purchase and selling of goods. Arbitrage tends to equalize prices of a commodity in different markets.
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Artisan’s Lien
Artisan s Lien is a legal claim against another s property as security by a person who has invested labor upon, or added value to, such property and who has not been reimbursed for the value of the labor and materials.
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ATA carnet
ATA carnet is a International customs document, accepted by countries that are parties to the ATA conversion, and used by firms that send or take goods abroad on a temporary basis as sales samples or exhibits at international conventions. Goods covered by the ATA carnet are imported and exported free from customs duties.
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Atomistic Society
Atomistic Society is an economy in which there is a distinct preponderance of small, independent producing units, as compared with big aggregates of capital in industry and trade.
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Above Par
In the securities market above par refers to, a premium price, which is either paid or quoted, that is above than the face value of the item.
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Accelerated Clause
It is a section of a written legal document that provides that a balance or reminder of a debt becomes payable immediately under several circumstances, such as failure to make a scheduled payment.
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Accumulation Unit
Accumulation Unit is a unit in an investment trust in which dividends are ploughed back into the trust, after reducing income tax, enabling the value of the unit to addition. Accumulation Unit is connected with life assurance policy.
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ACII
Initial for Abbreviation for Associate of the Chartered Insurance Institute.
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Agribusiness
Agribusiness is the sector of the economy involved with the processes and procedures of agriculture, including farming, services and supplies.
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Assignment Clauses
Assignment Clauses in insurance refers to the assignment of proceeds of a policy before a loss occurs. A collateral assignment, in which the policy is assigned to a lender as collateral for a loan. After a loss has occurred, the benefits may be assigned like any other fund.
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At-the-close order
It is a stock market order to purchase or sell that is to be executed at or as near to the close of the trading day as is practicable; any such order or part thereof not so executed is treated as cancelled.
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Automatic Dividend Reinvestment Plan
It is an agreement between mutual fund and a shareholder, whereby dividends are automatically used to bought additional shares of stock in the fund.
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Automatic Reinstatement
Automatic Reinstatement is the continuance of complete effectiveness of an insurance contract, after a loss has occurred, in an amount equal to the face value of the contract.
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Automation
Automation is a application of such machines in business and industry, It is automatically operate or perform a set of interrelated operations with virtually no human labour. Its latest application is computer. It is derived from the Greek world ‘Automotos’ which denotes self-moving. It was Delmar S. Harder who is said to have first used the word in Ford Motor Company in 1950, to indicate the automatic sorting out of the components of an automobile and their automatic movement from one process of production to another.The basic features of automation: 1. Self-direction and self control; 2. Communication, computation and control; 3. Integrated system. The benefits: 1. Ensures spedy and error free work; 2. Reduced material and labour wastage; 3. Provides exact service at the right time; 4. Brings down investment per unit of output or per employee; 5. Provides all round satisfaction to consumers and clients. The demerits: 1. Creates displacement and surplus in an enterprise; 2. Hinders creation of more job opportunities; 3. Involves heavy initial investment and recurring expenses for maintenance.
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Abatement
Abatement means the cancellation of all or portion of a past or prospective expenditure. A deduction or cancellation of an assessed tax. Also, any item of incidental income accounted for as a deduction of general cost.
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Adjusted Cost Basis
For the purposes of accounting, the value of property equal to the actual cost plus improvements minus depreciation.
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Assurance
Assurance referes to a declaration tending to encourage confidence. In terms of commercial world it means a payment of premium "at regular period intervals in returns for a fixed sum which will become payable at a stated time. It does not depend upon a possibility. Best examples are life and endowment policies. In life assurance, payment becomes due on the death of the life assured. In endowment assurance, payment becomes due on the death of the life assured. With endowment assurance, payment becomes due after the expiry of the stated period. Generally, both are combined in a policy.Assurance policies may be with or without profits. A policy with profits entitles the holder to a share in the profits of the company during the term of the policy. Premiums on these policies are normally higher than that of other policies.
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Autonomous Consumption
Autonomous Consumption means the minimum level of nominal expenses people plan to make for consumable goods, regardless of their level of nominal disposable income.
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Average Demurrage Agreement
Average Demurrage Agreement in transportation, refers to an agreement to offset detention debits with credits.
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Accommodation Endorser
A individual or a bank that endorses a loan to another party; for example, a parent company may endorse a bank loan to a subsidiary. The endorser becomes a guarantor and is secondarily liable in case of failure. Banks may endorse other banks acceptance notes, which can then be traded on the secondary market.
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Adjustable Peg
It is a system which allow changes in the par rate of foreign exchange after a nation has had long run disequilibrium in its balance of payments. The same is applied for short run variation within a narrow range of a few per cent above and below the par value.
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Affreightment
Affreighment is a contract for for transporting goods by sea. It is also known as charater party or ocean bill of lading.
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AIDA
AIDA acronym for four fundamentals of selling: attention, interest, desire, action. It is used as a test of the merits of an advertising or sales promotion program.
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Analytical Forecasting
Analytical Forecasting means forecasting gross national product by judging the components of demand and then combining them into an overall estimate.
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Audit Bureau of Circulation
Audit Bureau of Circulation is an independent organization which is established in 1914, ABC provides certified evidence of the paid circulation of publications in the United States.
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Auxiliary Activities
Auxiliary Activities in institutional accounting, is the business operations carried for the service of employees and patrons but not necessarily directly related to the primary functions and purposes of the institution. Examples are found in a university that maintains dormitories, a bookstore, cafeterias, and so on.
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At-the-opening order
It is a stock market order to purchase or sell that is to be executed at the opening of the stock or not at all; any such order or part thereof not so executed is treated as cancelled.
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Audit Trail
Audit Trail is a notation accompaying a transaction entry or posting that refers to its source records or documents.
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AAR
It stands for against all risks, It is specially refers to freight insurance.
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Abstinence Theory of Interest
The philosophy that interest gained by saving money in an interest bearing savings accounts is a reward for not spending the money on goods and services.
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