Tamil Nadu HSE Second Year Commerce flashcards

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

Scalar chain

Fayol's principle that authority flows from the top to the bottom in a chain of command; a gang plank allows direct communication between equals at the same level in emergencies.

Unity of command

A principle stating that each subordinate should receive orders from and be accountable to only one superior, avoiding confusion and conflicting instructions in the organisation.

Delegation

Assignment of work, authority and responsibility by a superior to a subordinate. Authority and responsibility can be delegated, but accountability for results remains with the delegator.

Esprit de corps

Fayol's principle of building team spirit and unity among employees, emphasising harmony and collective effort rather than individual interest in achieving organisational objectives.

Differential piece-rate plan

Taylor's wage incentive scheme paying a higher rate per unit to workers who meet or exceed the standard output and a lower rate to those who fall below it.

Partnership registration

Registration of a partnership firm is optional under the Indian Partnership Act 1932, but an unregistered firm cannot sue third parties to enforce contractual rights.

Joint stock company

A business organisation incorporated under the Companies Act with a separate legal entity, perpetual succession, limited liability of members and ownership separated from management.

One Person Company

A company form under the Companies Act 2013 permitting a single individual as member, requiring a nominee for succession and enjoying limited liability status.

Liberalisation

The 1991 economic reforms that reduced industrial licensing, freed interest rates, opened sectors to private and foreign investment and reduced government control over business.

Treasury bills

Short-term money market instruments issued by the government, usually with maturities of 91, 182 or 364 days, sold at a discount and redeemed at face value.

Commercial paper

An unsecured short-term promissory note issued by large creditworthy companies to raise working capital, with maturity generally between 15 and 365 days.

Primary market

The segment of the capital market where new securities are issued and sold for the first time by companies to raise fresh capital through public issues or private placement.

SEBI

Securities and Exchange Board of India, established in 1988 and given statutory powers in 1992, regulating securities markets and protecting investor interests.

Repo rate

The rate at which the RBI lends short-term funds to commercial banks against government securities, used as a quantitative instrument of credit control.

Trading on equity

Use of debt or preference capital carrying a fixed return to magnify earnings available to equity shareholders, favourable when return on investment exceeds the fixed cost of funds.

Net working capital

The excess of current assets over current liabilities, indicating the short-term liquidity available to finance day-to-day operations of a business.

Operating cycle

The period from purchase of raw material to collection of cash from debtors, computed as inventory holding period plus production period plus receivables period minus payables period.

Debenture

A debt instrument acknowledging a loan to a company, carrying a fixed rate of interest, usually secured by a charge on assets and repayable after a specified period.

Current ratio

A liquidity ratio computed as current assets divided by current liabilities; a ratio of about 2:1 is conventionally considered satisfactory for short-term solvency.

Debtors turnover ratio

A ratio of credit sales to average debtors, showing how many times receivables are converted into cash during a year; higher turnover indicates faster collection.

Proprietary ratio

A solvency ratio computed as shareholders' funds divided by total assets, showing the proportion of total assets financed by owners rather than outsiders.

Return on investment

A profitability ratio computed as net profit before interest and tax divided by capital employed, expressed as a percentage, measuring overall earning efficiency of funds used.

Trial balance

A statement listing debit and credit balances of ledger accounts on a particular date to verify arithmetical accuracy; it cannot detect errors of principle or complete omission.

Sacrificing ratio

The proportion in which existing partners give up their share of profit in favour of an incoming partner, computed as old ratio minus new ratio.

Securities premium

Amount received on issue of shares in excess of face value, credited to a separate account usable only for purposes such as bonus issue or writing off preliminary expenses.

Prime cost

The total of direct material, direct labour and direct expenses incurred in manufacturing a product, forming the first stage of a cost sheet.

Break-even point

The level of output or sales at which total revenue equals total cost, leaving no profit or loss; in units it equals fixed cost divided by contribution per unit.

P/V ratio

Profit-volume ratio computed as contribution divided by sales, expressed as a percentage; it indicates how much each rupee of sales contributes to fixed cost and profit.

Contract costing

A costing method applied to long-term construction or engineering work executed against specific customer orders, where costs are accumulated separately for each contract.

Udyam registration

The online registration process for micro, small and medium enterprises in India, enabling access to government schemes, subsidies and priority sector credit benefits.

Minor's agreement

An agreement by a person below eighteen years is void ab initio under the Indian Contract Act, though a minor may be a beneficiary and can enforce a contract for benefit.

Unfair trade practice

A deceptive method used to promote sale of goods or services, such as false representation, misleading advertisement or offering fake discounts, actionable under consumer law.