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Abandonment Value
The amount which could be recovered from an investment project if it were immediately to be abandoned. The simple decision rule is that a project should be abandoned if its abandonment value exceeds the net present value of its projected cash flows.
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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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Acceleration Principle
The basic relationship between the change in the amount of output and the volume of investment spending is known as the acceleration principle.
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Acceptance
The action of signifying on the face of a bill of exchange that liability is accepted under it.
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Accountants International Study Group
A body representative of accountants from a number of countries, which considers a variety of topics and issues, reports on them.
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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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ABC method
An application of the principle of management by exception by which stock is analysed into categories by value of total annual usage which is also called as ‘Split Inventory System’.
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Above the line
The ‘line’ is that dividing the profit and loss account from the appropriation a/c.
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Abridged Accounts
Accounts which, while covering the related full financial period, are not fully detailed financial statements. Such accounts may be used for giving information in a summarised form e.g. to its employees.
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Abscond
To run away, often taking property or money.
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Abstinence
The conduct of a person who either abstains from the unproductive use of what he can command, or designedly prefers the production of remote to that of immediate results.
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ACA
The designatory letters of an associate member of the Institute of Chartered Accounts in many countries
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Accounting Review
The journal of the American Accounting Association, which is published quarterly and gives, learned articles on accounting and on accountancy education.
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Account rendered
A term appearing against the opening on a statement sent by a supplier to a customer, which indicates that this amount is brought forward from a previous statement from which full details may be obtained if required.
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Accumulation Units
Units in a unit trust where the income is reinvested in further units rather than being distributed in cash.
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Achievement Test
General term in psychological testing, specially used in the USA, for a test which measures achievement in a particular occupation.
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Activity Sampling
A work-study sampling technique in which a large number of planned immediate observations is made over a given period of time of a group of machines, processes or workers.
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Actuary
A professional person employed by insurance company or a pension fund concerned with assessing the financial implications of insurable risks.
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Additional Premium
A premium charged in respect of an insurance policy where its terms are amended at the request of insured after the original premium has been paid. The amendment may be of the risk insured against or of the value of the property insured.
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Ad Hoc
In Latin, it means, "for this". Refers to a limited situation.For example, an adhoc committee is one limited to a specific intention and may be dismissed on completion of its task.
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Accelerating Vocational Training
Training or (in most cases) Training or (in most cases) retraining the aim of which is to help adult workers to acquire skills which traditionally have been acquired by apprenceship in a much shorter period than is usually taken by an apprenticeship. Such programmes are usually government sponsored.
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Acceleration Clause
A provision in an agreement for the repayment of a loan by instalments that if a specified number of instalments are not paid then all the outstanding payments are due immediately.
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Access Right
The level of access, which is granted to users of a system e.g., read a file only, or writes to a file.
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Accomodation bill
A bill of exchange which has been drawn on and accepted by a reputably party for the purpose of giving value to the bill so that it can be discounted.
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Accounting
The principles and techniques used in establishing, maintaining and analysing the records of the financial transactions of a business. Accounting is primarily concerned with devising recording methods, keeping records, internal auditing and reporting to management.
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Act of Bankruptcy
An action by a debtor which leads to a presumption of insolvency and therefore legally allows a creditor to instigate bankruptcy proceedings.
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Administration Cost
All management expenses concerned with directing and controlling an organisation, which are not directly related to research, development, production, distribution and selling activities.
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administrative Costs
An important classification of cost within the profit and loss account. It contains costs, which directly relate to administration and might include telephone, office salaries and postage.
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Administrator
A person appointed to deal with the affairs of a deceased person where there is no executor. This might occur because no executor was named in the will or because the named executor is unable or unwilling to act. And also in the cases where no will was left.
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Administratix
The feminine form of administrator.
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Advice Note
A document along with a delivery of goods, which advises as to the kinds, quality and, quantity of goods delivered. It does not contain any details of price or total cost. It should be verified that it agrees with the actual goods delivered and with the order that was placed for them.
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Age Admitted
Words used in a policy of life assurance to signify that the insurer has already seen proof of the age of the insured, usually a birth certificate, and that no further proof of this will be required in the event of a claim.
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Ageing Schedule
An analysis of the debtors of a business, which shows how old each and every element of debt, is.
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AICPA
Abbr. American Institute of Certified Public Accountants.
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Algol
An international algorithmic procedure-oriented computer language.
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A List
A list of the holders of partly paid shares in a company at the time of its closure.
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Allonge
A piece of paper sticked on to a bill of exchange and similar negotiable instrument to provide more space for endorsements when the space originally available on the back of the document has been used. It is necessary only for a document, which is circulated widely during its currency
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Almoner
A person responsible for the financial control of an institution, providing a humanitarian service, such as a hospital or a home for the aged.
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Amnesty
A release from obligations and liabilities arising out of past actions.
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Amortisation
The process of gradually extinguishing a liability, debt over a period of time. The process of absorbing into costs over a predetermined period the value of wasting assets such as leases or royalties.
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Analysis
The breakdown of a total figure into its component parts. In accounting, we meet the analysis of Sales.
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Above-the-line Advertising
Any form of advertising for which a commission is payable to a recognized advertising agency operating on behalf of his client.
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ACCA
The designatory letters of an associate member of the Chartered Association of Certified Accountants.
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Accelerated Depreciation
A method of calculating depreciation in which larger proportion of an asset s value is written off in the early part of its life than in later parts. Examples of this method are reducing balance method .
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Acceptance Sampling
In statistical quality control, the extraction of a sample from a lot of goods or materials to be inspected for the purpose of deciding whether the whole lot will be accepted or rejected.
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Account Sales
A detailed statement sent by an agent to his principal following the sale of goods by the agent on behalf of the principal. It accounts for the money received from the sales, stocks remaining and any expenses or commission retained by the agent out of the proceeds of sale, sale is cash or credit, etc.
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Adjuster
A professional person appointed to examine insurance claims in order to determine their validity and confirm their amount.
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Affinity Card
A credit card issued on a condition that specified amounts are paid by the issuer to a named charity. The card is usually produced in a characteristic style to indicate this and so also gives publicity to the charity concerned when the card is used.
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Agricultural Property relief
A relief given against inheritance tax in respect of property used for agricultural operations.
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AIDA
Stands for attention, interest, desire, and action. A well-known mnemonic used in training salesmen, to indicate the correct sequence for a selling interview.
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Alpha Stock
A section of shares traded on the stock exchange including the shares of large companies, which are dealt in every day.
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And Reduced
Words which may be required for a period to be added to the name of a company whose capital has been reduced.
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Annual Return
A document which must be submitted annually by every company to the registrar of companies. It includes address of registered office, location of registers of members and of debenture holders, etc.
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Annuity
A fixed annual payment that may continue indefinitely, but frequently will continue only during the lifetime of a named individual.
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Ante Post
Betting on the outcome of a horse race where the odds are determined at the time the bet is placed, rather than the time of starting of the race. Ante post betting is available on selected important races only. It has the disadvantages that the stake is lost if the horse does not run. Its advantage is that higher odds may be obtained.
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Anti-avoidance
A description of measures, usually in the form of legislation, the aim of which is to prevent taxpayers from avoiding the payment of tax by methods which, although technically legal, were not intended while drafting the original legislation.
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Anti-inflation
Description of a policy adopted by the government with the intention of preventing or reducing inflation
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AOQL
Abbr. Acceptable or Average Outgoing Quality Level.
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Appropriation
An amount set aside out of profits for a specific goal.
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APR
Abbr. Annual Percentage Rate.
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APT
A programming language developed in USA and used for the production of tape for controlling numerically controlled machine tools.
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Arbitrage
A process whereby an investor buys and sells securities and adjusts financing arrangements so as to take advantage of market inequalities in risk and return. The main purpose behind it is to bring the market into equilibrium.
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Arbitrageur
One who engages in arbitrage.
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Arbitration
The process of settling a specific issue or complaint between two or more parties, by submitting the dispute to an fair person or group of people chosen by the parties or to a neutral agent appointed by statutory authority. The decision is binding on both the parties.
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Arrangement
An agreement made by an individual or a company with account payables whereby the latter agree to stop from pressing for immediate settlement in return for a promise of future action, which improves their chances of recovering the debt.
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Array
A statistical term for an methodical grouping of values according to magnitude, usually from the smallest to the largest.
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Articles of Association
A document, which is required by law before a company, may be registered. It contains the rules and regulations that will govern the legal obligations and the internal working of a company.
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Assay
A process by which the pureness of a precious metal is determined and certified.
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Accountancy
The activity of preparing and auditing the financial records and statements of organisations.
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Acid Ratio Test
It is also known as quick ratio or liquid ratio. The determination of the ratio of total cash, debtors and the market value of marketable investments of a business to its current liabilities.
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ACT
Advance Corporation Tax.
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Actuarial value
A valuation of contingent liabilities based on probabilities, which is commonly used in the field of insurance and pension funds.
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Added value
The value added to materials by the process of production. It is calculated by deduction from the gross output, the cost of materials, fuel, etc. used in the production process. The value added on net output is the fund out of which salaries, wages, depreciation, sales and similar expenses, etc., are paid and also includes profit.
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ADMOS
Abbr. Automatic Device for Mechanized Order Selection. Term used to describe machinery used in an integrated warehouse which checks product availability, selects correct quantities of specific goods, records stocks and shortages and in conjunction with conveyor systems passes goods direct to the packing and dispatch location. Punched cards or tape activates the machinery.
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ADP
Abbr. Automatic Data Processing.
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Advancement
The action of a trustee in using funds from a trust for the benefit of a beneficiary in advance of the time when the benefit would normally become available.
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Age allowance
An allowance given against the income of an individual while calculating the amount of income tax due when the taxpayer is over the age of 65.
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Analytical Review
Term applied to audit procedures prepared to test the fundamental consistency and probability of a set of accounting statements. It will include the calculation of ratios and comparisons with other similar types of business. Analytical review is the subject of an auditing guideline.
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Angel
A person who provides finance for theatrical productions.
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Apportionment
The process whereby a single sum is divided according to some exact method into portions, which are then attributed to some activity, cost centre or person. The term may arise in one of a number of different connections.
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Assembly Line
The arrangement of machines, equipment, materials and employees which allows the work in process to progress in a particular order from operation to operation until the process or a phase thereof has been finished, or until the product has been assembled.
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Asset Backed
Securities represented by tangible, valuable assets.
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Asset stripping
A process whereby a company acquires a controlling interest in another company for the purpose of disposing of its assets. The opportunity arises where the management of the company taken over has underutilized the assets so that the share price is below the market value of the underlying assets. Assets stripping make a quick profit for the company engaging in it but brings to an end the business of the company taken over.
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Assignment Avalysis
A method of job evaluation developed for professional and technical jobs in which the assignments that the job carries out are graded according to complexity, experience required and so on.
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Attributable Profit
That part of the total profit currently estimated to arise over the duration of a long-term contract which fairly reflects profits arising from the work done to date.
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Audit Risk
The risk that, although an audit has been properly carried out, a matter which materially affects the truth and fairness of the accounts is overlooked.
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Audit Trail
The chain of evidence, which leads an auditor from an item in the accounts to an underlying, documents verifying the transaction.
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Ad Valorem
In proportion to value. Value added tax is an example of an ad valorem tax.
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Adverse Variance
A difference between an actual expense or cost and the amount of a budgeted or standard cost such that its effect is to reduce profit below that planned.
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AH4
Both a verbal and non-verbal general intelligence test (and also an element of numerical aptitude test), taking about an hour to conduct and used with different norms according to the level being tested.
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AIIE
Abbr. American Institution of Industrial engineers.
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Assented Stock
A security whose holders have agreed to some conduct so that the agreement is binding on a purchaser of the security. Assented Stock may have different market value from non-assented stock.
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Automatic Data Processing(ADP)
1.The execution of recording operations of an accounting nature by electronic equipment based on a computer, whereby all stages from original record to ultimate report are carried out without human intervention. 2.The systematic order of operations performed on date by automatic means, with the object of extracting information or revising it. Also known as electronic date processing.
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Automatic Telling
The provision by means of a computer linked machine of services normally provided by the counter clerk. In order to use the service a customer has to insert a special plastic card into a machine and key in a personal identification number. The machine will then, following further keyed instructions, accept deposits, pay out cash, and state the balance on the account.
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Annuitant
A person who receives an annuity.
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Annuity Method of Depreciation
A method of providing for depreciation, which takes into account the interest forgone by the funds, invested in the depreciating assets.
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Antedate
To give a document a date before that on which it was actually executed.
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Artificial Person
An enterprise or organization that has powers, either granted by law or by custom, that resembles those of a natural person.
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Artificial Transaction
A transaction, which has, of itself no commercial justification but which has been undertaken purely to gain some benefit deriving from the form of the transaction.
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Asset Cover
The extent to which a share is represented by valuable assets.
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Assignment
The transfer of rights owed by another to some third party. For an assignment to have legal effect it must be absolute, in writing and be communicated to the one owing the right.
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Automatic Scheduling with Time Integrated Resource Allocation(ASTRA)
A type of network analysis technique developed by a company for solving problems involving the allocation of resources and the scheduling of activities by time periods in order to produce a realistic estimate of completion dates.
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Autopert
A system of rapidly producing critical path analysis and pert networks by using a computer.
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Associated Company
A company in which an investment fulfilling certain conditions is held which are as follows, 1. The investing company’s interest in the associated company is effectively that of a partner in a joint venture, or 2. The investing company’s investment in the associated company is for the long term and is substantial and having regard to the disposition of the other shareholding, the Investing Company is in a position to exercise a significant influence over the associated company.
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Attachment of earnings
The consequence of a court order whereby a portion of a person’s wages or salary can be deducted before payment and applied in settlement of an responsibility to a third person.
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Attendance Allowance
A social security benefit payable to those who are bound to attend on an invalid.
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Attorney
The power to handle the financial affairs of another with the same authority as they would themselves.
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Authorised Capital
Total value of a company’s share capital as registered for the time being, all of which need not have issued.
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Auto-financing
The use of part of sales proceeds to provide the means of payment for capital expenditure, i.e. that part which is left over when all cash expenses, taxes, and dividends have been paid.
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Average Outgoing Quality Level (AOQL)
The maximum average or acceptable quality of all lots passed by an inspection system, using sampling methods. It may also be expressed in terms of a percentage of defective items.
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After Market
The market in a security usually shares, which develops immediately after their original issue.
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