BSEB Matric Commerce key terms

A business owned, financed and controlled by one person, who keeps all profits and bears unlimited personal liability for the firm's debts and obligations.

A business relationship between two or more persons who agree to share profits of a lawful business carried on by all or any of them acting for all.

An artificial legal person created by registration, having perpetual succession, a common seal and capital divided into transferable shares held by members.

The rule that a member's financial risk is capped at the unpaid amount on shares held or the amount guaranteed, so personal assets stay protected from company debts.

A situation where the owner's personal property can be used to pay business debts because the business has no separate legal identity from its owners.

The feature of a registered company that it continues to exist despite the death, insolvency or exit of members, until it is formally wound up.

A voluntary association of persons who join to promote common economic interests, governed by the principle of one member, one vote, and distributing surplus as dividend on patronage.

A business owned and managed wholly or partly by government, set up by statute, special Act or as a government company to serve public and commercial objectives.

The systematic recording of financial transactions in books of account in chronological order, so that money received and paid can be traced and summarised.

An accounting method in which every transaction is recorded with equal debit and credit effects in two or more accounts, keeping the books in balance.

The two sides of an account: debit records value coming in or assets and expenses increasing, while credit records value going out or liabilities, capital and income increasing.

The book of original entry where each transaction is first written with date, particulars, ledger folio, debit amount and credit amount, supported by a brief narration.

A single record in the journal showing the accounts debited and credited for one transaction, with equal amounts on both sides and a short explanation.

A journal entry that involves more than two accounts, such as one debit with several credits, used when a single transaction affects many ledger accounts.

The principal book of accounts containing all accounts in classified form, where journal entries are posted to show the balance and movement of each account.

The process of transferring debit and credit amounts from the journal to the relevant ledger accounts, using the folio reference to link both books.

A statement listing debit and credit balances of all ledger accounts on a given date to test arithmetical accuracy of posting; total debits should equal total credits.

A temporary account opened to hold the difference in a trial balance so that final accounts can be prepared while the error is still being located and corrected.

A final account that shows gross profit or gross loss by matching net sales with cost of goods sold, that is opening stock plus purchases plus direct expenses less closing stock.

A final account that records indirect expenses and indirect incomes to convert gross profit into net profit or net loss for the accounting period.

A statement of assets, liabilities and capital on a particular date, prepared to show the financial position of a business after final accounts are closed.

The permanent, gradual and continuing fall in the book value of a fixed asset caused by wear and tear, passage of time or obsolescence, charged as an expense.

Interest calculated only on the original principal for the whole period, using principal multiplied by rate multiplied by time divided by one hundred.

Interest calculated on principal plus interest already earned, so the amount grows each period and the total exceeds simple interest over more than one period.

A way of expressing a number as a fraction of one hundred, widely used to compare discounts, commission, profit margins and rates of change.

A reduction allowed on the marked or list price of goods, either as trade discount deducted on the invoice or cash discount allowed for prompt payment.

A payment to an agent or middleman calculated as an agreed percentage of the value of business secured or sales effected.

A measure of central tendency found by adding all observations and dividing the total by the number of observations; also called arithmetic average.

The middle value of a series arranged in ascending or descending order; for an even number of items it is the average of the two middle values.

The value that occurs most frequently in a set of observations, useful when the most common size or preference has to be identified.

Any person who buys goods or hires services for consideration, including a user of such goods or services, but excluding a person who buys for resale or commercial purpose.

The legal entitlements of buyers, including safety, information, choice, redressal, hearing and consumer education, recognised to balance the bargaining power of sellers.

A forum established under consumer protection law at district, state and national levels to hear complaints and grant relief such as replacement, refund or compensation.

The statute that protects buyers of goods and services, defines unfair trade practices and defects, and provides speedy redressal through consumer commissions.

Unfair treatment of consumers through adulteration, false weights, misleading advertisements, hoarding or high prices, which consumer awareness and law seek to prevent.

A person who identifies an opportunity, arranges land, labour, capital and enterprise, bears the risk of the venture and organises production of goods or services.

The process of setting up and running a new business, taking calculated risks, innovating and combining resources to create value and generate employment.

Earning a livelihood by working for oneself in one's own trade, profession or small enterprise instead of taking a salaried job under an employer.

A written document describing the product, market, operations, finance and risks of a proposed venture, used to guide the promoter and persuade lenders or investors.