Commerce Competitive Exam 2024 Practice Flashcards

These flashcards cover various topics from a commerce exam, including international trade theories, business environment concepts, accounting standards, financial institutions, and legal acts.

Macro Environment

An external environment component consisting of the Economic Environment, National Income, and patterns of income distribution.

Fiscal Policy Tools

Key instruments including Public Expenditure, Deficit financing, and Taxation.

Comparative cost theory of International Trade

A theory of international trade attributed to David Ricardo.

International Trade theory of opportunity cost

A theory of international trade developed by Gottfried Haberler.

Factor Endowment theory

An international trade theory associated with Heckscher-Ohlin.

Doctrine of Reciprocal demand

An international trade theory associated with J.S. Mill.

NAFTA

North American Free Trade Agreement which came into force in January, 1994, embracing the USA, Canada, and Mexico.

WTO Bodies

Core units of the World Trade Organization including the Dispute settlement body, Trade policy review body, Council for Trade in Goods, and Council for Trade-related Aspects of IPR.

IMF (International Monetary Fund)

An organization focused on providing short-term loans and maintaining financial stability.

World Bank

An organization focused on providing long-term loans and maintaining sustainable development for member countries.

Accounting Standard 2 (AS 2)

An accounting standard that recommends the FIFO, Specific identification, and Weighted average methods for inventory, while LIFO is not recommended.

Materiality

An accounting concept relating to the importance of an item or event.

Going concern concept

An accounting assumption that a firm is not being bankrupt.

Historical cost concept

A normal basis used for accounting assets based on their original cost.

Consistency

The practice of using the same accounting method from one period to another.

Eric Flamholtz model

A human resource accounting model that considers the movement of an employee from one role to another during their career; an extension of the Lev and Schwartz model.

Utility

The want-satisfying power of a commodity.

Perfect Competition

A market characterized by many sellers and buyers, homogeneous products, unlimited long-run resource mobility, and perfect knowledge.

Prisoner's Dilemma

A specific model of game theory used to analyze oligopoly.

Cobb-Douglas production function property

The elasticity of substitutes between inputs is equal to 1.

Negative Pledge clause

A provision that forbids the future pledging or mortgaging of any of the borrower's assets.

Growth Firms (Walter model)

Firms where the rate of return is greater than the cost of capital ($r > k$), implying they should have a zero payout ratio.

Capital Budgeting Discounting Techniques

Includes Profitability Index (PI), Net Present Value (NPV), and Internal Rate of Return (IRR).

Arbitrage

The process of buying a currency cheap in one market and selling it dearer in another market at a particular point of time; also keeps the cost of capital constant despite changes in capital structure.

Global Depository Receipt (GDR)

A bank certificate issued in more than one country for shares in a foreign company, similar to an American Depository Receipt (ADR).

Net Operating Income Approach

A capital structure theory where changes in the capital structure do not affect the market value of the company or the overall cost of capital.

Median

A measure of central tendency that is not sensitive to extreme values.

Sampling error

The difference between a sample statistic and its corresponding population parameter.

f-test

A statistical test used for more than two sample means.

Organizing function

A managerial role involving the creation of a structure of functions and duties to be performed.

Groupthink

A deterioration of mental efficiency, reality testing, and moral judgement resulting from in-group pressure.

SARFAESI Act

An act related to Non-Performing Assets (NPAs) that allows banks to auction properties of defaulting borrowers.

Pradhan Mantri Jan Dhan Yojana

An Indian government scheme to promote financial inclusion by providing bank accounts to all citizens.

IRDA

The regulatory body mainly focusing on Life Insurance and General Insurance companies in India.

Solvency Margin

The level of financial stability that regulatory frameworks ensure insurance companies maintain.

Product mix width

The number of product lines a company carries.

TRIPS

The agreement on Trade-Related Aspects of Intellectual Property Rights, closely associated with IPR.

Caveat emptor

A legal doctrine stating the buyer of goods is responsible for his own choice or selection.

Section 66F (IT Act)

A section of the Information Technology Act providing for life imprisonment as punishment for cyber terrorism.

Short-term capital asset (Section 2 (42A))

A capital asset held by an assessee for not more than 36 months immediately preceding the date of transfer.

Section 50C (Income Tax)

A special provision for determining the full value of consideration in cases of transfer of land and building.