Definition: Microeconomics is a subfield of economics which focuses on analysing the behaviour of economic agents within an economy so as to make decisions concerning the allocation of limited resources which have multiple uses. As the name suggests, it is the microscopic view of the economy, wherein the economic activity of small individual units and their decisions related … [Read more...] about Microeconomics
Budgetary Control
Definition: Budgetary control refers to a method of management control and accounting, wherein the budgets are established, by forecasting the activities beforehand to the maximum extent and a constant comparison is made between the actual results and the budgeted figures, so as calculate the variances (if any) and take corrective steps accordingly to ensure the achievement of … [Read more...] about Budgetary Control
Zero-Based Budgeting (ZBB)
Definition: Zero-based budgeting or ZBB, is an emerging budgeting technique, which is introduced with the aim of coping with the demerits of the traditional budgeting system. Zero-based budgeting is different from the incremental (conventional) budgeting system in the sense that the former begins with a zero base, i.e. from a scratch and are not based on previous trends. In … [Read more...] about Zero-Based Budgeting (ZBB)
Tax
Definition: Tax refers to a mandatory financial contribution to the country's revenue, imposed by the government on the income of people, business profits, activities or included in the cost of goods, services or transactions. The taxes are the primary source of government revenue, which is used to finance government expenditure on the provision of education, health care, … [Read more...] about Tax
Goodwill
Definition: In business terminology, goodwill is the monetary worth of the advantage which a firm possesses over the other firms in the market with respect to profits which are expected to be derived in future over and above the normal profits. As the time goes by, a business develops a good reputation, name, strong connections and a heavy customer base in the market, which … [Read more...] about Goodwill
Public Finance
Definition: Public Finance implies a branch of economics, which is concerned with government activities and the various sources of financing expenditure. Basically, it deals with government revenue, expenses, and debt, as well as its impact on the entire economy. As its name suggests, public finance is all about the management of finances of the public authorities or public … [Read more...] about Public Finance
Responsibility Centre
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