AP Intermediate Commerce (BIEAP) flashcards

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

Accounting equation

Assets equal liabilities plus capital. Every transaction changes at least two elements while keeping both sides equal, which is why total debits always match total credits.

Suspense Account

A temporary account opened to hold the difference in a trial balance when errors cannot be located immediately. It is closed once the errors are found and corrected.

Written Down Value method

A depreciation method applying a fixed percentage to the opening book value each year, so the depreciation amount falls over time and the asset is never fully written off.

Del-credere commission

An extra commission paid by the consignor to the consignee in return for the consignee bearing any bad debts arising from credit sales of consigned goods.

Gross profit

Net sales minus cost of goods sold, computed in the Trading Account. It excludes indirect expenses and incomes, which are dealt with in the Profit and Loss Account.

Unregistered partnership firm

A firm not registered under the Partnership Act, 1932. It cannot sue third parties for its dues, though partners may still sue each other for dissolution and accounts.

Perpetual succession

A feature of a company meaning members may come and go but the company continues to exist until legally wound up; death of a member does not affect it.

Coordination

The orderly synchronising of effort to provide unity of action. It is described as the essence of management because it runs through planning, organising, staffing, directing and controlling.

Marketing mix

The set of controllable variables a firm blends to get the response it wants in the target market: product, price, place and promotion, extended by people, process and physical evidence.

Delegation of authority

The downward transfer of authority from a superior to a subordinate, accompanied by responsibility and accountability. Authority may be delegated but accountability for results remains with the superior.

Giffen goods

Inferior goods whose demand rises when price rises, an exception to the law of demand. The income effect outweighs the substitution effect for poor consumers.

Marginal product

The addition to total product from employing one more unit of a variable factor. It becomes zero when total product is at its maximum and negative thereafter.

National income

Net national product at factor cost: gross national product at market price minus depreciation minus net indirect taxes. It measures factor incomes earned by normal residents.

Repo rate

The rate at which the central bank lends short-term funds to commercial banks against securities. Raising it makes credit costlier and helps control inflation.

Monopolistic competition

A market with many sellers of close but differentiated products, free entry and exit, and selling costs such as advertising, giving each firm limited price-setting power.

Balance of payments

A systematic record of all economic transactions between residents of a country and the rest of the world in a year, comprising the current and capital accounts.

Absolute cell reference

A spreadsheet reference written with dollar signs, such as $A$1, that stays fixed when the formula is copied to other cells, unlike a relative reference.

Primary key

A field or combination of fields that uniquely identifies each record in a database table. It cannot hold duplicate or null values.

Router

A network device that forwards data packets between different networks using IP addresses, choosing the best path; unlike a switch, it connects separate networks.

De Morgan's laws

Boolean identities stating that the complement of A AND B equals not-A OR not-B, and the complement of A OR B equals not-A AND not-B.

IF function

A spreadsheet function that tests a condition and returns one value if it is true and another if false, written as IF(condition, value_if_true, value_if_false).

Debit note

A document sent by a buyer to a seller to record a return of goods or an overcharge, debiting the seller's account in the buyer's books.

Days of grace

Three days added to the period stated on a bill of exchange to calculate the due date; if the due date falls on a public holiday, payment is due the next working day.

Principle of indemnity

An insurance principle that the insured cannot recover more than the actual financial loss suffered, preventing profit from insurance and applying to fire and marine cover.

Crossed cheque

A cheque with two parallel lines drawn across its face, which must be deposited into a bank account and cannot be encashed over the counter.

Reported speech tense shift

When the reporting verb is in the past, present tenses shift to past, present perfect to past perfect, and will to would; time words such as now become then.

Active to passive voice

The object becomes the subject, the verb takes a form of be plus the past participle, and the doer follows by or is omitted when unimportant.

Subject-verb agreement

A verb must agree with its subject in number and person, so 'one of the boys is' and 'each of the students has' take singular verbs.

Note-making

Condensing a passage into headings, sub-headings and short points using standard abbreviations, omitting examples and repetition while keeping the main ideas intact.

Guna sandhi

A Sanskrit and Telugu sandhi rule where a or aa followed by i or ii gives e, by u or uu gives o, and by ri gives ar.

Telugu gunintam

A secondary sign attached to a consonant to indicate the vowel sound that follows it, since Telugu consonants carry an inherent a sound.

Sanskrit vibhakti

A grammatical case ending of a noun, such as prathama for the nominative and sasthi for the genitive, showing the noun's relation to other words in the sentence.