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Abandonment
1.It means the relinquishment of property (personal or real) that one no longer wants, thereby waiving all rights to it. 2.In insurance, the practice of turning damaged property over to the insurer and claiming its full value. The property is then said to be "abondoned" to the insurer. 3.In transportation, the refusal of a shipment by a consignee (the person authorized to accept a shipment) because of damage. Responsibility for the value of the goods then rests with the carrier.
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Above-the-Line’ Payments and Receipts
It means payments and receipts contained in that part of Government’s Budget dealing with expenditure to be met out of revenue raised mainly from taxation. The payments cannot be made by borrowing from some other source.
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Absenteeism
It means absence from work which may be involuntary due to sickness or other causes, or voluntary.
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Absolute Monopoly
It means the control of the entire output of a commodity or service, for which there is no substitute, by a single producer or supplier. This kind of situation rarely occurs in real life.
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Absorption Costing
Absorption Costing in accounting means, assigning all the fixed and varible costs of a business to the goods or services produced, without distinguishing between them. It is the opposite of direct costing, where direct, variable costs are distinguished from fixed costs and general expenses on the assumption that the former are a more valid basis for valuing output.
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Abstract of Title
It means a wiritten document used to determine used to determine the ownership of a particular parcel of land. It summarizes the material portions of every deed and other transaction that affect the title of that land, thus representing a history of its ownership.
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Accelerated Depreciation
It means the depreciation of new plant or machinery over a shorter period than normal. Firms in development areas have been authorized to do this.
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Accepting House
It is a financial institution which ‘accepts’ bills of exchange; with such backing the bills command a higher price.
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Accountant
It refers to a person trained in accounting, who may either be employed by a firm or work independently.
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Account Period
It is a period during which transactions take place on the Stock Exchange. The year is divided into twenty-four account periods; these are normally fortnightly periods, but there are four three-week periods in each year to cover Christmas and other holidays.
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Accounting Costs
It means costs considered as recorded costs only; economic costs may be larger or smaller when alternative costs or opportunity costs and external effects are taken into account.
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Accounts Receivable Financing
It means the use of money owed to a firm to obtain funds for current operating expenses or other purposes. The accounts receivable either are used as collateral for a loan or are sold outright; the latter method is called factoring.
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Accrued
It describe earnings, sales, expenses, or other items of income or outlay that have been made or incurred but not yet received or paid.
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Active Circulation
It is that part of the note issue of the Central Bank in circulation at any given time.
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Activity Rate
It means the proportion of civilian employees (employed plus registered unemployed ) in a given population age group.
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Actuary
It refers to a member of the insurance profession, specially skilled in the application of mathematical and statistical techniques to the problems of insurance of all types.
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Abstinence or Agio Theory of Interest
It is a theory that interest is a payment for abstaining from current consumption. This is but a partial explanation as there are other reasons for saving.
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Acceptance
It is the agreement of the drawee of a bill of exchange signified by his signing the bill, to carry out the order of the drawer.
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Accommodating Movements
It means transfer of gold and convertible currency abroad to meet deficits in the total balance of payments of a country.
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Account Day
It means the day on which all bargains done on the Stock Exchange must be settled, being usually seven days after the close of dealing at the end of the previous account period. Also known as settlement day, and occasionally as pay day.
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Active Balance
It is a favourable balance of payments when receipts from the export of goods and services exceed expenditure on the import of goods and services.
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Ad Valorem
It means ‘According to value’.
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Ad Volorem Tax
It is a duty imposed on commodities in proportion to their value, i.e. a duty expressed as a percentage and not a flat amount. It is commonly used in respect of import tariffs.
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Advance
It means any payment made before it falls due, thus representing a loan. For example, authors frequently receive advance payments against future royalties to help them meet expenses while finishing a manuscript.
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Affidavit
It is a statement of facts, given voluntarily and sworn and signed before a court officer or other authority.
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Agency for International Development (U.S.)
It is an agency within the U.S. Department of State responsible for the administration of the economic assistance programmes of the U.S. Government. Established in November, 1961, the Agency is the successor to the International Co-Operation Administration.
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Aggregate Supply
It means the total physical volume of goods and services currently coming on to a given market.
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Aggregation
It refers to the bringing together or summing of primary data. For example, the national income is an aggregate, in contrast with the income of an individual.
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Aggregative Index Number
It means an index constructed from totals rather than from individual categories. For example, a simple aggregative price index compares the total amount spent on a group of selected items (or market basket) in any given year to the total spent during the base year.
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Aggregative Model
It means an econometric model in which the variables are themselves constructed from groups of individual variables, as when a price index number is substituted for a set of prices.
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Air Consignment Note
It means where goods are transported by air, an air consignment note replaces a bill of leading. This is not a document of little to the goods, but merely a copy of the consignment contract.
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ABC Control
It also means selective inventory control. A system of inventory control in which every item carried in stock is assigned a rating of A, B, or C, according to its coastlines, with the twofold aim of reducing capital investment in inventories and lessening the likelihood of running out of low-cost but important items needed for production. All items used in production, ranging from expensive machine parts to nuts and bolts, are listed in order of their cost for a given period (for example, the number of items used during one week multiplied by their unit cost ). The most expensive items, constituting perhaps 10 per cent of the period’s outlay, are classed A; the next most expensive, comprising and additional 20 per cent of the period’s expenditures, are classed B; all others are classed C. Since they represent a high investment, inventories of A items are kept as low as possible; inventories of B items are also kept low, but with a slightly greater safety margin against depletion; and inventories of C items are much larger and less closely controlled.
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Ability-to-pay Principle
It means the principle that tax assessments should be based on the taxpayer’s ability to pay taxes, so that the rich pay more than the poor. This principle encompasses the idea of horizontal equity-that those with equal ability should be taxed equally-as well as that of vertical equity-different tax burdens for people with different abilities.
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Abrasion
It means loss of weight in coins caused by wear and tear.
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Absolute Advantage, Theory of
It means in international trade, a statement that countries tend to specialise in the production of those goods and services which they can make or provide most profitably.
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Abstinence
It means the sacrifice of current consumption to enable resources to be directed to the production of capital goods.
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Acceleration Principle
It means the idea that an increase in demand for consumer goods (food, clothing, furniture, etc. ) produces a far greater increase in the demand for and production of capital goods (food-processing equipment, looms, lathes, etc.).
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Accelerator
It refers to the process by which changes in the demand for consumer goods bring about even larger variations in the demand for the capital equipment used to make them. The accelerator is a factor which tends to accentuate booms of slumps in the economy.
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Acceptance Credit
It is a method of payment which is used in international trade. If the credit of a foreign import merchant is considered satisfactory accepting house may open an acceptance credit for him in London.
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Accession Rate
It also means hiring rate. The number of employees added to the payroll during a give period, an important leading indicator of future business conditions.
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Accomodation Bill
It is a bill drawn accepted of endorsed for the sole purpose of discounting it, no goods being given or received for it, thus providing short-term cash accomodation.
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Accomodation Endorsement
It means the endorsement of a note, or other instrument of credit by one person to another, who is then able to obtain the loan.
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Accounting Period
It is a specific period of time for which and operating statement is normally prepared. The most common such period is one month, but companies also may use 4 weeks, yearly quarters, 26 weeks, 48 weeks, 52 weeks, or any other time period of their choice.
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Account Payable
It means the amount owed by a business to its suppliers and other regular trading pertness, who generally give customers anywhere form 10 to 90 days to pay for merchandise already shipped.
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Accrual Basis
Accrual Basis in accounting means a system of charging income and expenses to the period in which they are earned or incurred rather than to the period in which they are actually received or paid.
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Acquittance
It is a wiritten acknowledgement that a debt or other financial obligation has been discharged, or paid in full.
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Active Market
It is a market for a particular class of stock or shares in which there are frequent and regular dealings.
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Administered Price
It is also means managed price. A price set by the seller but not totally under the seller’s control.
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Advance Bill
It means an invoice submitted before the goods or services itemized wherein have actually been delivered or performed. It is usually requested by buyers for tax purposes or some similar reason.
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Agio
It means a premium. It frequently refers to the premium paid for exchanging one currency for another, or for a foreign bill of exchange.
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Advance Refunding
It means an opportunity for holders of bonds due to expire soon to exchange them for new bonds on particularly favourable terms.
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Advice
It means a note sent by one merchant to another advising him of the despatch of goods ordered.
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Affluent Society
It is a term coined by J. K. Galbraith to describe the post-World War II state of the American economy, which he regarded as rich in private resources but poor in public services.African Development BankFounded in 1964, a bank to promote economic development and social progress of the member states. It has 31 members. The bank has its headquarters at Abidjan, Ivory Coast.
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After Date, After Sight
It specifying the due date of a note, bill of exchange, or other credit instrument. After date refers to a given period following the date appearing on the instrument; thus, "payable 30 days after date" on a note drawn on February 10 means that payment is due on March 12. After sight refers to a given period following presentation of the note for acceptance, and the date for acceptance must similarly be specified.
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Aggregate Demand
It means the total effective demand or expenditure of all purchasers of capital and consumer goods within a given market.
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Allocated Cost
It means allocated cost in accounting means the assignment of expenditures to various accounts. For example, fire-insurance premium costs might be spread among a firm s departments in proportion to the value of insurable assets located in each department.
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Allonge
It means slip of paper attached to a bill of exchange to provide additional space for endorsements, should this be required.
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All-Or-None Order (U.S.)
It refers to a market or limit price order for the purchase or sale of stocks and shares which is to be executed in its entirely or not at all.
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Allowed-Or Standard-Times
It is the prescribed times for the completion of a task, based on time-study data.
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Annual Report
It is a formal financial statement issued once a year by a corporation to all its shareholders, listing assets, liabilities, and earnings, and indicating the company s standing and profits at the end of the business year.
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Application Money
It means the amount of money which must accompany an application for a new issue of stocks or shares.
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Apportionment
1. Apportionment in accounting means distributing a cost over several accounting periods in proportion to the benefits received. It is used particularly for long-term costs, such as depreciation or research. 2. In government budgeting, assigning all or part of an appropriation to a particular period of a fiscal year or to a specific agency or project.
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Arbitrage
It means the simultaneous purchase of currency, securities, or goods in one market and their sale in another market at a higher price. The practice of arbitraging itself minimizes price differences in the various world markets, so that profits come mostly from large-volume transactions.
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Agistment
It means the feeding and taking care of cattle for reward.
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Agribusiness
It means the sector of the economy concerned with the production, processing, and distribution of agricultural products, including farm supplies (machinery, fertilizer, pesticides, herbicides ) needed for production, various agricultural service (animal husbandry, milling, etc.), and also the economic agencies that serve agricultural producers (credit institutions, marketing associations, etc, ).
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Agricultural Subsidies
It means payments to the farmers by the Government for the purpose of encouraging home production of foodstuffs while maintaining reasonable retail prices to consumers.
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Appreciation
Appreciation means an increase in the value of an asset. For example, an increase in: (a) the value of property in relation to other assets during a period of growing demand; (b) the value of stocks held by merchants and manufacturers during a period of rising prices; (c) the value of a currency when its value increases in relation to the values of other currencies; or (d) the value of stocks and shares in general, or particular categories, on the stock exchange.
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Ask
Ask in business means the price offered by a seller, in effect the same as a bid. Also, offer. In the securities and commodities trade, the lowest price a seller is willing to accept.
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Auction
It means the examination of the account books of an organisation, by an accountant or other competent person, to ascertain their correctness.
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Automation
It is a system of automatic machine control extending over and entire series of manufacturing operations or other productive activities; an advanced form of mechanisation achieving various levels of sophistication. The general effect is to reduce manpower requirements.
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Avail
Avail in finance means the proceeds of a discontinued loan, that is, the amount the borrower actually receives, the interest having been deducted in advance.
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Agricultural Wages Board
It refers to a statutory body responsible for negotiating the wages of agricultural workers.
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Allotment
It means act of allotting newly issued debentures, or shares between applicants who have responded to an offer for subscription.
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Allowance
1. Allowance in commerce and trade means a permitted tolerance in quantity, quality, or some other measurement, based either on custom or on a specific agreement between buyer and seller. Allowances are commonly made for a given percentage of shrinkage, damage, breakage, spoilage, impurities, etc. 2. In setting a debt, a deduction granted or accepted by the creditor for damages, delays, shortage, or some other imperfection, or for goods accepted as partial payment. 3. In accounting, an amount set aside for bad debts, depreciation, or some other purpose.
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Amalgamation
It means the merging or combining of two or more firms.
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Annuity
It is a kind of retirement insurance whereby, after a person has made payments for a given number of years, he or she receives income for a specific period or for life. Since annuities often are purchased from life insurance firms, they are sometimes called annuity insurance.
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Asian Development Bank:
It is the first Ministerial Conference on Asian Economic Co-operation was held in Manila (Philippines) in 1963 which suggested the establishment of a Regional Development Bank of Asia. As a result, the Asian Development Bank (A.D.B.) came into existence with 31 member-countries and was formally opened for business on December 19, 1966. The initial capital of the Bank was $1,000 million but later it was raised to $1,100 million. The most important subscribers are Japan ($200 million), India ($ 92 million), among the Asian member-countries. Among the non-regional members, the U.S.A. tops the list with $ 200 million followed by the U.K. with $ 30 million. The ADB is patterned on the model of the World Bank as a provider of "hard" loans and follows the idea of regional development banks for the purpose of supplementing the efforts of the World Bank and the international Development Association (IDA). There are two kinds of member countries in this body-19 regional members and 13 non-regional members (there are advanced countries of Europe and America who are inserted in the economic development of this region). The main object of the ADB is to promote economic co-operation and growth in Asia and the Far East and to contribute to the acceleration of the process of economic development of the developing countries of Asia both collectively and individually.
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As Is
It is a term for secondhand or damaged goods sold at retail without either an express or implied warranty by the seller. The term in effect warns the buyer to inspect the items carefully, since the burden of determining their condition falls on him or her.
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Asset Backing
It means the net assets of a company divided by the number of issued shares
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At Par
It means stocks and shares the market price of which is the same as the nominal or face value. If new stock is issued at par, then £ 100.
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Authorized Clerk
It means stockbroker’s clerk allowed to deal on the floor of the Stock Exchange.
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Allotment Letter
It means letter advising an applicant how much stock or how many shares he has been allotted and specifying the amounts due and dates of payment in respect of them.
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Antitrust Legislation
It refers to any law which is designed to curtail monopolistic practices on the part of a private business and to ensure competition.
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Apprenticeship
It is the system under which young persons training in a particular occupation have to serve their time , usually for five years, before being recognised as skilled.
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Appropriation Account
It means a business account showing how the net profit has been apportioned between dividends, reserves, profit-sharing scheme, pension fund, and so on.
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Arbitration
It is a method of settling industrial disputes. Both sides to a dispute agree to refer the matter to an impartial person or body for adjudication, there being a formal or informal agreement to accept the decision or recommendation.
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Assessment
It is the process of appraising property for tax purposes. Its result, called an assessed valuation, becomes the tax base for local property taxes. In insurance, the practice of certain mutual companies or reciprocal exchanges of requiring the insured to pay additional charges to meet losses greater than anticipated. A policy that limits the insured’s liability to the amount of premium paid is called nonassessable.
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Assets
It means the property of a business; they may be classified as: Current Assets, consisting of cash, stock and book debts; Fixed Assets, consisting of buildings, plant and machinery; Intangible Assets, being the value of goodwill or patents.
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At Discretion
It is a term qualifying an instruction given by a client to his stockbroker to buy or sell stocks or shares, it gives the broker discretion as to price.
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At Limit
It is a term qualifying an instruction given by a client to his stockbroker to buy or sell stocks or shares, it places a specified limit on either the highest price that may be paid, or the lowest price at which a sale may be made.
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Attribute
It is a qualitative characteristic of an individual, as distinct from a variable or qualititative characteristic. Sex is an attribute, age is a variable.
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Austrian School of Economists
It is the name given to a group of 19th Century economists at the University of Vienna, among whom were Carl Menger (1840-1921 ), Friedrich von Wieser (1851-1926) and Eugen von Bohm-Bawerk (1851-1914). Their contribution rested largely in the development of the utility theory of value, refuting the cost of production theory of value of the older Classical School of Economists.
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Autoregression
It is a series if observations in which the value of each observation is partly dependent upon the values of those observations immediately preceding it. Each observation stands in a regression relationship with one or more of the immediately preceding observations.
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Amortisation
(a) It means the gradual repayment of a debt by means of a sinking fund; (b) the annual writing down of the value of an asset by depreciation.
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Antedate
It means to put a date earlier than the current one on a document such as a life insurance policy, in order to make it take effect sooner. However, changing the date on a negotiable instrument, such as a bill or note, is illegal.
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Anticipation
Anticipation in accounting means recording, income or profit before it is actually realized. For example, the total proceeds of an installment sale might be recorded before all the payments have actually been made.
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Applied Economics
It is the branch of economic science devoted to the study of practical problems, utilising the principles and tools of economic analysis provided by theoretical economics.
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At the Market
It is a term qualifying an instruction given by a client to his stockbroker to buy or sell stocks or shares, it indicates that the broker may buy or sell at about the market price prevailing at the time the instruction is given.
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Autarky
It is an ideal of self-sufficiency, a country attempting to be as independent as possible of imports from other countries. A costly policy for those who try it and an unrealistic one for most.
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Appropriation-in-Aid
It means an item in the estimates of a Government Department which records any revenue received from the sale of goods and services to the public; the effect of such an item is to reduce the amount of money required from the Exchequer during the coming financial year.
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Articles of Association
It is a document which must be submitted to the Registrar of Companies when seeking registration of a company. The articles determine the internal constitution of the company, either accepting the standard articles suggested in the Companies Act or setting out special terms of their own. Articles cover such important matters as: 1. Issue and transfer of shares; 2. Alteration of capital; 3. Borrowing powers; 4. Shareholders’ meetings and voting rights; 5. Appointment and powers of directors; 6. Presentation and auditing of accounts.
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At Best
It means in relation to the stock market, an abbreviation for ‘at the lowest possible price’ in respect of a buying order, and ‘at the highest possible price’ in respect of a selling order.
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Audit Office
It means the office of the department of the Comptroller and Auditor-General. The department is responsible for the annual audit of the accounts of the Government departments.
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Auditor’s Report
It is the report submitted by an auditor appointed to examine the accounts and relevant records of an enterprise. Limited companies are required to get their accounts annually audited by an approved auditor. A copy of the Auditor’s Report must be appended to every Balance Sheet, and documents that the law requires must be attached thereto and laid before members at the annual general meeting. The Auditor’s Report must also accompany the accounts that are filed with the company’s Annual Return to the Registrar of companies.
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Average Cost
It means the average cost of producing each unit of output, i.e. Cost of producing (n) units/n The greater the proportion that fixed costs bear to variable costs the more rapid the decline in average costs as the total output is increased. In economics, costs include ‘normal profit’, this being a necessary payment in respect of the special type of labour called ‘enterprise’.
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Averaging
It is the practice of buying more of a security when its price has fallen in order to lower the average cost of a holding.
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ACCA
The designatory letters of an associate member of the Chartered Association of Certified Accountants.
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Across the Board
Affecting every value equally.
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Action Skill
The ability to carry out skillfully the behavior required by a situation.
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Activities Analysis
It is one of the techniques, which are used in deciding the organization structure appropriate for a company.
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After Market
The market in a security usually shares, which develops immediately after their original issue.
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Acceptance Liability Ledger
A ledger containing the list of bills accepted for each customer of bank in form of an account that contains his name, address, date, line, credit number, acceptance number, bill amount, total amount accepted or expired, expiration date and payment date.
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Accession Rates
It refers to an average number of persons added to a payroll in a specified period of time per 100 employees.
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Accounting Rate of Return
It is a ratio derived by dividing income for a period by the average investment that has occurred during that period.
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Abatement
A deduction, which reduces the effect which some charge, would otherwise have. This term is usually used for abatement of taxation, which is given in special circumstances.
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