First cost + cost of perpetual Capitalized cost of any property is equal to the

maintenance
Declining balance method Which of the following depreciation methods cannot have a
salvage value of zero?
Depletion The lessening of the value of an asset due to the decrease in the
quantity available preferring to the natural resources?
Capital gain An increase in the value of a capital asset is called
Fixed assets Lands, buildings, plant and machinery are example of
Depreciation Decrease in the value of a physical property due to the passage
of time?
Effective rate We may classify an interest rate, which specifies the actual rate
of interest on the principal for one year as;
Interest rate The ratio of the interest payment to the principal for a given unit
of time and usually expressed as a percentage of the principal?
Bid bulletin Additional information of prospective bidders on contract
documents issued prior to bidding date?
Bank note The paper currency issued by the Central Bank which forms part
of the country’s money supply?
Gross margin Gross profit, sale less cost of goods sold, as a percentage of sales
is called
Book value Worth of the property as shown in the accounting records of an
enterprise
Working capital Those funds that are required to make the enterprise or project
a going concern
Interest Define as the future value minus the present value
Interest rate The ratio of the interest payment to the principal for a given unit
of time and usually expressed as percentage of the principal
Salvage value Scrap value of an asset is sometimes known as
Deflation Reduction in the level of national income and output usually
accompanied by the fall in the general price level?
Annuity It is a series of equal payment occurring at equal interval of
time?
Market The place where buyers and sellers come together?
Monopsony A market whereby there is only one buyer of an item for which
there are no goods substitute
Monopoly A market situation where there is one seller with many buyer
Bilateral monopoly A market situation where there is one seller and one buyer
Bilateral oligopoly A market situation where there are few sellers and few buyers
Duopsony A market situation where there are only two buyers with many
sellers
Deferred annuity It is a series of equal payments occurring at equal interval of time
where the first payment is made after several periods, after the
beginning of the payment
Break even no gain no loss The total income equal the total operating cost
Gratuitous Kind of obligation which has no condition attached.
Perfect competition This occurs in a situation where a commodity or service is
supplied by a number of vendors and there is nothing to prevent
additional vendors entering the market
Luxuries These are products or services that are desired by human and
will be purchase if money is available after the required
necessities have been obtain
Necessities These are products or services that are required to support
human life and activities that will be purchased in somewhat the
same quantity even though the price varies considerably
Prime cost Direct labor cost incurred in the factory and direct material costs
are the costs of all materials that go into production. The sum of
these two direct cost know as:
Acid-test ratio An index of short term paying ability is called
Depreciation An artificial expenses that spreads purchase price of an asset or
another property over number of years.
Salvage value Estimated value at the end of the useful life
Physical inventory Consists of the actual counting or determination of the actual
quantity of the materials on hands as of a given date.
Annuity A series of uniform accounts over a period of time
Supply The quantity of a certain commodity that is offered for sale at a
certain price at a given place and time
An asset Work-in process is classifies as
Chairman of the board What is the highest position in the corporation?
Private Type of ownership in business here individuals exercise and
enjoy the right in their own interest.
Partnership An association of two or more individuals for the purpose of
operating a business as co-owners for profit
Luxury It is defined to be the capacity of a commodity to satisfy human
want.
Market value It is the amount which a willing buyer will pay to willing seller for
a property where each has equal advantage and is under no
compulsion to buy or sell
Oligopoly A condition where only few individuals produce a certain product
and that any action of one will lead to almost the same action of
others.
Authorized capital Grand total of the assets and operational capability of a
corporation.
Book value The worth of the property equals to the original cost less
depreciation
Interest Money paid for the use of borrowed capital
Current assets Liquid assets such as cash and other assets that can be converted
quickly into cash, such as accounts receivable and merchandise is
called
Economic life The length of time which the property may be operated at a
profit
Escalatory clause The provision in the contract that indicates the possible
adjustment of material cost and labor cost
Depreciation recovery The present worth of all depreciation over the economic life of
the item is called
Ordinary annuity A type of annuity where the payments are made at the end of
payment period starting from the first period
Law of supply and demand When free competition exists the price of a product will be that
value where supply is equal to the demand
Return Investment The ratio of the net income to the owners’ equity is known as
Coupon bond Bond to which are attached coupons indicating the interest due
and the date when such interest is to be paid