In accounting, to accrue means to record an expense or revenue in the company’s financial statements even if no cash transactions have taken place. Accrued items include revenues earned or expenses incurred but not yet received or paid.
Adjusting entries are made at the balance-sheet date under an accrual accounting system to ensure that the income and expenditure of a business are included in the correct period. Examples include adjustments for depreciation, prepayments, accruals, and closing stock.
Annual accounts, also known as annual financial statements, are comprehensive reports on a company's financial position and performance over a fiscal year. These accounts include the balance sheet, income statement, statement of changes in equity, and cash flow statement.
A Certified Financial Statement is a set of financial documents including the balance sheet, income statement, and possibly other related financial reports, that a Certified Public Accountant (CPA) has audited and attested to. These statements confirm that the financial records present fairly, in all material respects, the financial position and performance of a company in accordance with applicable accounting principles.
A Comprehensive Income Statement is a financial document that reports a company's total earnings, including those not realized in the income statement, such as unrealized gains and losses, allowing for a more inclusive picture of financial performance.
An essential metric in accounting, Cost of Goods Sold (COGS) represents the direct costs associated with the production of goods sold by a company. This value is critical in determining the business's gross profit and provides insights into the efficiency and cost management of production processes.
Cost of Goods Sold (COGS) represents the direct costs attributed to the production of goods sold by a company. COGS include the cost of materials, direct labor, and manufacturing overhead.
Credit Watch is a term used by bond rating agencies to indicate that a company's credit is under review and its rating is subject to change. The implication is that if the rating is changed, it will typically be lowered, usually due to an event that adversely affects the income statement or balance sheet.
Current Value Accounting (CVA) is a method aimed at providing an income statement and balance sheet in terms of current dollars, enhancing the quality of financial information during times of inflation.
The percentage rate used in various methods of depreciation to determine the amount of depreciation that should be written off a fixed asset and charged against income or the profit and loss account.
Discontinued operations refer to the sale, disposal, or planned sale in the near future of a business segment, such as a product line or class of customers. The financial results of these operations are reported separately in the income statement.
Earnings Before Taxes (EBT) measures a company's profitability, calculated as sales revenues minus cost of sales, operating expenses, and interest expenses, before taxes have been deducted.
Final Accounts are comprehensive financial statements produced at the end of a company's financial year, representing its overall financial status and performance over the period. They contrast with interim accounts produced during the financial year.
A financial report consists of a firm's financial statements that provide information about its financial performance and position over a specific period.
A financial statement is a written record of the financial status of an individual, association, or business organization. It includes a balance sheet, an income statement (or operating statement or profit and loss statement), and may also include a statement of changes in working capital, net worth, and cash flow.
Financial statements are annual statements summarizing a company's activities over the last financial year, providing a comprehensive overview of its financial health and performance.
The income statement, also known as the profit and loss statement, provides a detailed summary of a company's revenues, expenses, and profits over a specific period of time. It offers crucial insights into the financial performance of a business.
The income statement, also known as a profit and loss account, is a financial document that provides a summary of a company's revenues, expenses, and profits/losses over a specific period. Under both International Accounting Standards (IAS) and the Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102), the income statement plays a pivotal role in financial reporting.
An interim statement is a financial report of a public corporation covering only a portion of a fiscal year, typically issued quarterly to provide an update on financial performance.
Miscellaneous Income refers to revenue that is unrelated to and much smaller than that from the main business operation. It usually originates from incidental or auxiliary activities.
Net earnings, also known as net income, represent the total profit of a company after all expenses and taxes have been deducted from total revenue. It is a crucial indicator of profitability.
Net loss occurs when a company's total expenses exceed its total income for a specific period, such as a fiscal quarter or year.
Net margin—the percentage of revenue that remains as net income after all expenses have been deducted—serves as a key indicator of a company's overall profitability and financial health.
Net profit, also known as net margin or net profit margin, represents the amount of revenue that remains after all the expenses of an organization have been subtracted from its total sales. It is a crucial measure of a company's financial performance and profitability.
Nonoperating expenses (or revenues) refer to the financial transactions that are incidental to a business's core operations. They typically arise from activities that are secondary to the main business functions.
Operating expenses are the costs and operating revenues are the income incurred and generated by an organization in the normal course of business, excluding any extraordinary items.
Operating Income, also known as Operating Profit or Operating Earnings, is a measure of a company's profitability that excludes interest and income tax expenses. It is used to evaluate the performance of a company's core business activities.
Other Comprehensive Income (OCI) represents gains and losses that are not included in net income on the income statement but are reported in the equity section of the balance sheet.
The Profit and Loss (P & L) account is a financial statement summarizing the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.
Pretax earnings, also known as pretax profit or profit before tax (PBT), refer to a company's earnings before any federal or state income taxes have been deducted. It is a key measure of a company's financial performance and highlights the profit generated from its operations excluding tax-related expenses.
Pretax income, also known as earnings before tax (EBT), represents the amount of income earned from business or investments before the deduction of any applicable income taxes.
Pro Forma refers to the presentation of financial data that adheres to a specific format and often includes hypothetical or projected numbers to provide a basis for analysis and planning.
A Profit and Loss Account is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, leading to a company's net profit or loss.
A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time, usually a fiscal quarter or year.
A Profit and Loss Statement (P&L) summarizes the revenues, costs, and expenses incurred by a company during an accounting period, offering a comprehensive view of its financial performance. Also known as an Income Statement, operating statement, statement of profit and loss, or income and expense statement.
In the USA, a quarterly report is a financial report issued by a company every three months, containing essential financial statements and a narrative overview of business operations.
Revenue and Expense Accounts are fundamental components in accounting that track the income and expenditures of a business over a specific period. These accounts help determine the net profit or loss and are essential for financial reporting and analysis.
Revenue expenditure refers to the costs that are immediately written off to the income statement in the accounting period in which they are incurred. These expenditures are associated with the revenue generated within the same period.
A transaction that is generally of a short-term nature and is only expected to benefit the current period. Revenue transactions appear in the profit and loss account of the period.
A financial statement that combines the income statement and the statement of retained earnings, detailing a company's profit, dividends, and equity changes during a period, as outlined by the Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102, Section 6).
An older term for the statement of total recognized gains and losses, now commonly referred to as the statement of comprehensive income, which provides a comprehensive summary of all income and expenses recognized in a financial period.
Total comprehensive income is the sum of net profit shown in the profit and loss account (income statement) along with any other comprehensive income. Under the Financial Reporting Standard Applicable in the UK and Republic of Ireland (Section 5), it should be presented as part of a statement of comprehensive income (statement of total recognized gains and losses).
