I – Accounting Glossary

glossary-smartiesAccounting definitions.

Source: Wikipedia.org

Income OR Earnings
Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. For example, most individuals’ income is the money they receive from their regular paychecks. In business and accounting, income (also known as profit or earnings) is, more specifically, the amount of money that a company earns after paying for all its costs. To calculate a company’s income, it starts with its amount of revenue, deducts all costs, including such things as employees’ salaries and depreciation, and the number that results is its income, which may be a negative number. At least part of this money is typically reinvested in the business, and some of the money might be used to pay the owners (the shareholders) a dividend.

Income per share OR Earnings per share
Income per share is the bottom line net income divided by the number of shares outstanding. It is more often referred to and reported as earnings per share.

Income statement
Statement of revenue of a company less expenses incurred.

Intangible asset
Intangible assets are defined as assets that are not physical in nature. For example the building that a business owns is a tangible asset because it can be valued and sold for a specific sum of money. The most common form of intangible asset is called Goodwill. This is the customer base that the business has built up and is the principal reason that a business might sell for more than the value of the tangible assets.

Interest
Interest is a surcharge on the repayment of debt (borrowed money).

Inventory
Organizations in the U.S. define inventory to suit their needs within Generally Accepted Accounting Practices (GAAP), the rules defined by the Financial Accounting Standards Board (FASB) and enforced by the Securities and Exchange Commission (SEC) and other federal and state agencies. Inventory management affects organizations’ internal operations through their cost accounting methods. The bar codes printed on nearly all goods are called Stock Keeping Units, or SKU’s for their role in managing inventory.

Investment
Investment is a term with several closely related meanings in finance and economics. It refers to the accumulation of some kind of asset in hopes of getting a future return from it.