2-3 Glossary

Expense

A cost incurred to provide products and services to customers and operate a business.

Invoice

A time-stamped document outlining the goods or services sold, total amount owed, and the terms/methods of payment.

Sale on Account

An agreement to provide a good or service in exchange for payment at a later date.

Accounts Receivable

The current balance of all money owed to a company for goods and/or services it sold to its customers, but that haven't yet been paid for by its customers.

Revenue

The money generated from all sales of goods and services over a certain time period; it is calculated by multiplying the average sales price by the number of units sold.

Net Income

The profit that remains after all expenses have been subtracted from revenue during a certain time period, often referred to as the "bottom line" or "net profit".