Economic Principles

Depreciation and Depletion: In fact, the term 'depletion' is used in respect of the extraction of natural resources like quarries, and mines, that reduces the availability of quantity of the material or asset. Depreciation, as stated earlier, is a loss in value of an asset generally arising on account of wear and tear.

Manufacturing a/c is prepared by the enterprises engaged in manufacturing activities. This financial statement does not show profit and loss figures but rather the cost of direct materials and labour. A manufacturing account also includes production overhead. 

Power and steam are direct factory expenses related to production, making them appropriate for the Manufacturing account. Carriage outward and goodwill are selling/administrative or non-operating items, and salary/wages (if general) usually go to the P&L.

Economic development aims in sustainable development when there is an abundance of capital assets in present as well as future generations. Therefore, capital assets must rise over time for sustainable development. 

Economic growth is a long-term process. Short-term fluctuations in income do not constitute economic growth; it requires a sustained increase over an extended period.

Economic development is considered multidimensional because it involves improvements in health, education, infrastructure, and social equity, rather than just an increase in economic output.

Sustained economic growth requires long-term increases in efficiency, which are typically driven by technological advancements. Volatile or intermittent growth suggests instability rather than the consistent improvement provided by technological progress.

The business activity are of two types :

Quasi-rent is the surplus income earned by man-made capital goods (like machines) in the short run, where the supply of such goods is inelastic.

In classical economics, rent is specifically defined as the payment made for the use of land, which is considered a factor of production with a fixed supply.

Money facilitates trade and investment, which are essential for production processes. By providing liquidity and a medium for exchange, it acts as a catalyst for economic activity.

Saving is that part of income which is not spent on consumption. It is also called deferred consumption.

In economics, underdevelopment is when resources are not used to their full socio-economic potential. As a result  local or regional development is slower in most cases than it should be, especially compared with the investment and innovation in countries that surround it. The scarcity of capital, technological backwardness, and unemployment are generally found in underdeveloped countries.

"Oikonomia" is a Latin word which means household as it is related to the financial management of  household activities through which the concept of economics was derived.