Definition: Responsibility Centre refers to an operating segment within the firm, lead by the manager who is accountable for its activities, performance and results, in terms of expenditure, profit, and return on investment. A responsibility centre has its own goal and objectives, plans and strategies, policies and procedures. Further, it has a dedicated team or staff who … [Read more...] about Responsibility Centre
Economic Activity
Definition: Economic Activities implies all the activities of producing, distributing, trading, consuming, exchanging and supplying, goods and services of value, at any level, in a society, for monetary consideration. These activities are undertaken with the aim of making money, acquiring wealth, earning a livelihood, and generating income from different sources. The … [Read more...] about Economic Activity
Economies of Scale
Definition: Economies of Scale can be understood as the proportionate reduction in the cost achieved by increasing the scale of production or expansion in the size of the plant, often gauged by the quantity of output produced, wherein the per unit cost of output decreases with the increasing level of production. Therefore, when there is a fall in the long run average cost of … [Read more...] about Economies of Scale
Factors of Production
Definition: In economics, factors of production, as the name signifies are the inputs or say resources acquired by the firm to use them in the production of goods or services, so as to earn a profit. The word 'production' refers to a systematic process of converting the inputs, into finished products, which can be goods or services. For this purpose, the product has to pass … [Read more...] about Factors of Production
Supply
Definition: In economics, "Supply" implies the quantity (how much) of a commodity that the producers, manufacturers or sellers are willing and able to offer to the market at different prices during a particular period of time. Basically, supply is something that the firm offers for sale, to the target audience in the market, which may not be something that the firm succeeds … [Read more...] about Supply
Demand
Definition: The word 'demand' is used to imply the quantity (how much) of a given commodity or service, the consumers are willing and able to buy, in a market during the particular period of time, at any price, or at any income or at any price of related goods. Demand is not just the desire for the commodity, rather when the desire is supported by the means to purchase, the … [Read more...] about Demand
Single Entry System
Definition: Single Entry System, is the oldest and most straightforward method of keeping records of financial transactions, which is rarely prevalent these days. In this system, only one side of the transaction is recorded, because of the absence of any prescribed rules and so the records maintained are more or less incomplete. In a nutshell, single entry system of … [Read more...] about Single Entry System
Operations Management
Definition: Operations Management can be understood as an area of management which is concerned with the government of system, processes and functions that manufacture goods and renders services to the end user, to provide desired utilities to them while adhering to other objectives of the concern, i.e. efficiency, effectiveness, and productivity. Objectives of Operations … [Read more...] about Operations Management
Fund Flow Statement
Definition: Fund Flow Statement implies a snapshot of the movement of funds, i.e. inflow or outflows of the firm's financial assets for a specific period. It represents, "from where the funds are received and where the funds are utilised" by the company during a particular period. The word 'fund' refers to a sum of money, which is used to finance the firm's day to day … [Read more...] about Fund Flow Statement
Liabilities
Definition: Liability, as the name suggests, is a legal obligation which reflects an amount that the company owes to outside parties, i.e. banks, financial institutions, individuals or entities, whose settlement may lead to the outflow of the firm's economic resources. In finer terms, liabilities are a company's financial debts, which indicates creditors claim on business … [Read more...] about Liabilities