Assam ASSEB HSLC Elective Commerce flashcards

34 cards. Read the term and the definition here. The deck at the top of this page is optional.

Business environment

The sum of internal and external factors - economic, social, legal, technological, political and natural - that influence a firm's operations, decisions and survival, and which the firm must monitor continuously.

Liberalisation

Reduction of government controls over business, such as licensing, price controls and foreign investment limits, aimed at increasing competition, efficiency and private participation in the economy.

Place utility

The value added to a good by moving it from where it is produced to where it is demanded, a utility created chiefly by transport.

Sole proprietorship

A business owned, financed and managed by one person who enjoys all profits but bears unlimited personal liability for the debts of the business.

Karta

The senior-most member who manages a Hindu undivided family business; coparceners' liability is limited to their share, but the karta's liability is unlimited.

Limited Liability Partnership

A body corporate with at least two designated partners in which partners' liability is limited to their agreed contribution, while internal management follows the partnership agreement.

Perpetual succession

A feature of a company meaning it continues to exist despite the death, insolvency or exit of members, since it has a separate legal identity from its owners.

Working capital

Funds required for day-to-day operations such as buying stock, paying wages and financing debtors; it circulates between cash, inventory and receivables within one operating cycle.

Debenture

A written acknowledgement of debt issued by a company, carrying fixed interest, usually secured by a charge on assets, and repayable at a stated time.

Capital gearing

The proportion of borrowed funds to owned funds in a company's capital structure; high gearing raises financial risk because interest must be paid regardless of profits.

Retained earnings

Profits kept in the business instead of being distributed as dividends; an internal, cost-free source of finance that strengthens owners' funds.

Entrepot trade

Importing goods into a country and then re-exporting them, often after processing or repacking, with the country acting as a trading intermediary between two others.

Bill of lading

A document issued by a carrier acknowledging receipt of goods for shipment; it serves as a receipt, a contract of carriage and, when negotiable, a document of title.

Letter of credit

A bank's written undertaking to pay an exporter on presentation of specified documents, used in international trade to reduce the seller's risk of non-payment.

Balance of trade

The difference between the value of a country's visible exports and visible imports over a period; a surplus means exports exceed imports.

Repo rate

The rate at which the central bank lends short-term funds to commercial banks against securities; raising it is a contractionary monetary measure.

CRR

Cash Reserve Ratio: the share of a bank's net demand and time liabilities that must be held as cash with the central bank, earning no interest.

Non-performing asset

A loan or advance on which interest or principal has remained overdue beyond the period prescribed by the regulator, causing the bank to recognise a loss.

Insurable interest

A financial relationship in which the insured would suffer a measurable loss if the insured event occurred; it is essential for a valid insurance contract.

Principle of indemnity

The insured is compensated only up to the actual financial loss suffered, not beyond it, so that insurance restores the position rather than yielding profit.

Reinsurance

Insurance of insurers: an insurer transfers part of its risk to another insurer to reduce exposure to large or catastrophic claims.

Bonded warehouse

A warehouse approved by customs authorities where imported goods may be stored without payment of duty until they are cleared for home consumption or re-exported.

Warehouse receipt

A document issued by a warehouse confirming storage of specified goods; it can be pledged with a bank to raise finance against the stored goods.

Time utility

Value created by making a good available at the time it is wanted, achieved through storage and warehousing between production and consumption.

AIDA model

A sales and advertising sequence: attract Attention, build Interest, create Desire and prompt Action, guiding the structure of a persuasive message.

Salesmanship

Personal, face-to-face persuasion in which a salesperson identifies customer needs, presents a product and closes a sale, allowing immediate feedback and objection handling.

Advertising

Paid, non-personal communication about a product or service through mass media, sponsored by an identified advertiser to inform, persuade or remind buyers.

Unfair trade practice

A trade practice using deceptive methods, such as false claims or misleading advertisements, to promote the sale of goods or services.

District Consumer Commission

The first-tier consumer redressal forum hearing complaints within its pecuniary jurisdiction, typically up to fifty lakh rupees at introduction of the 2019 Act.

Product liability

The responsibility of a manufacturer, service provider or seller to compensate a consumer for harm caused by a defective product or deficient service.

Udyam registration

The online registration process through which an enterprise in India is recognised as a micro, small or medium enterprise and can access related benefits.

Business plan

A written document describing the product, market, marketing strategy, operations, management and financial projections of a proposed or existing business.

Trial balance

A statement listing ledger account balances to test the arithmetical accuracy of double-entry postings; it may still balance despite errors of principle or omission.

Going concern concept

The accounting assumption that a business will continue operating for the foreseeable future, so assets are valued for use rather than for immediate sale.