Income Statement Preparation
Interest revenue
Amount of money earned from interest on loans or investments
Sales revenue
Amount of money generated from selling goods or services
Loss on inventory write-down (obsolescence)
Amount of money lost due to obsolete or unusable inventory
Loss on sale of investments
Amount of money lost from selling investments at a lower price
Interest expense
Amount of money paid as interest on loans or debts
Income tax expense
Amount of money paid as taxes on income
Patent amortization expense
Annual adjustment for the decrease in value of a patent
Comparative balance sheet
Balance sheet that shows the changes in assets, liabilities, and equity over time
Cash flows from financing activities
Cash inflows and outflows related to financing the business
Cash flows from investing activities
Cash inflows and outflows related to investments in assets
Cash flows from operating activities
Cash inflows and outflows related to regular operations
Net increase in cash
Change in cash balance after accounting for all cash flows
Dividends
Distribution of profits to shareholders
Cost of goods sold
Expenses directly related to producing goods or services
Selling expense
Expenses incurred in the process of selling goods or services
Operating expenses
Expenses incurred in the regular operations of a business
General and administrative expense
Expenses related to the overall management and administration of a company
Single-step income statement
Financial statement that shows all revenues and expenses in one category
Multiple-step income statement
Financial statement that shows revenues and expenses in separate categories
Statement of cash flows
Financial statement that shows the inflows and outflows of cash
Other income (expense)
Income or expenses not directly related to regular operations
Loss from operations of discontinued component
Loss incurred from the operations of a discontinued part of the business
Direct method
Method of reporting cash flows that shows actual cash receipts and payments
Liabilities
Obligations or debts owed by a company
Income tax rate
Percentage used to calculate income tax expense
Shareholders' equity
Portion of a company's assets that belong to the shareholders
Net income
Profit earned after deducting all expenses and taxes
Gross profit
Profit earned after deducting the cost of goods sold
Income from continuing operations
Profit earned from ongoing business activities
Operating income
Profit earned from regular operations before other income and expenses
Gain from sale of factory
Profit earned from selling a factory
Assets
Resources owned by a company that have economic value
Cash and cash equivalents
Total amount of cash and easily convertible assets