(a) Value Addition is the contribution of the enterprise to the current flow of goods and service. In other words, value added can be defined as the difference between value of output of a firm in a n accounting year and value of inputs brought from other firms (or value of intermediate consumption). Value added = Value of Output – Value of Inputs 

(b) Gross Domestic Product (GDP) : Gross Domestic Product (GDP) is the market value of all the final goods and services produced within the domestic territory of a country during a year. 

(c) Flow Variables : A flow is a quantity of any economic variable which is measured during a period of time (or per unit of time) say, a week, a month or a year. For example, monthly wages of a worker, the per hour speed of a train, production of cloth during a year etc. 

(d) Income from property and entrepreneurship in the form of rent, royalty, interest and profit is termed as operating surplus. 

(i) Income from Property : There are two principal forms of the income from property : 

(a) rent and royalty and (b) interest. 

(ii) Income from Entrepreneurship (Profit) : Profit is a residual factor payment to the owners of an enterprise.