Glossary of Accounting Terms

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Index of Accounting Terms - I

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Icon representing money coming into a business
Income Related Terms: Revenue, Earnings, Sales, Turnover What is Income? The total amount of money received by a company from its business activities, typically from the sale of goods and services.
Icon representing a summary of revenues and expenses
Income Statement Related Terms: Profit and Loss Statement (P&L), Statement of Earnings, Statement of Operations What is an Income Statement? A financial statement that reports a company's financial performance over a specific period, detailing revenues, expenses, and profit or loss.
Indirect Costs Icon representing operational expenses not tied to specific products
Indirect Costs Related Terms: Overhead Costs, Common Costs, Cost Allocation What are Indirect Costs? Business expenses that are not directly traceable to a specific cost object (like a product, service, or department) but support overall operations. Also known as overhead costs.
Icon representing indirect taxes embedded in price.
Indirect Tax Related Terms: Hidden Taxes, Consumption Tax, Excise Tax, VAT, Tariff What is an Indirect Tax? A tax collected by an intermediary (like a seller) and included in the price of goods/services, ultimately paid by the consumer (e.g., excise taxes, VAT, tariffs).
Icon representing an insurance policy or protection
Insurance Premium Related Terms: Premium, Insurance Cost, Policy Payment What is Insurance Premium? The amount of money an individual or business must pay periodically to an insurance company for coverage against potential risks.
Icon representing concepts like patents, trademarks, or goodwill
Intangible Asset Related Terms: Non-Physical Asset, Intellectual Property What is an Intangible Asset? An asset that is not physical in nature but has economic value because of the rights and privileges it confers to the owner.
Interest Expense Icon representing cost of borrowing
Interest Expense Related Terms: Debt, Liability, Income Statement, Notes Payable, Cost of Borrowing Interest Expense signifies the cost incurred by an entity for borrowed funds. It is a non-operating expense shown on the income statement.
Inventory Icon representing goods held for sale or production
Inventory Related Terms: Assets, COGS, Inventory Valuation Methods, Inventory Management What is Inventory? Encompasses goods a business holds for sale, raw materials for production, or work-in-process items. Key for asset management and COGS calculation.
Inventory - Days Sales of Inventory (DSI) Icon for inventory turnover analysis
Inventory - Days Sales of Inventory (DSI) Related Terms: Inventory, Inventory Turnover, Financial Ratios, COGS What is Days Sales of Inventory (DSI)? A financial ratio indicating the average number of days a company takes to turn its inventory into sales. Also known as days inventory outstanding (DIO).
Inventory - Economic Order Quantity (EOQ) Icon for optimal order size
Inventory - Economic Order Quantity (EOQ) Related Terms: Inventory Management, Inventory Costs, Ordering Costs, Holding Costs What is Economic Order Quantity (EOQ)? The ideal order quantity a company should purchase to minimize total inventory costs including holding costs, shortage costs, and order costs.
Inventory - First-In, First-Out (FIFO) Icon for inventory valuation
Inventory - First-In, First-Out (FIFO) Related Terms: Inventory Valuation Methods, LIFO, COGS, Ending Inventory What is First-In, First-Out (FIFO)? An inventory valuation method that assumes the first units purchased are the first ones sold.
Inventory - Goods-In-Process Icon for partially completed inventory
Inventory - Goods-In-Process Related Terms: Inventory, Work in Process (WIP), Raw Materials, Finished Goods, Manufacturing What are Goods-In-Process? Partially completed goods that are still in the production process; an inventory stage between raw materials and finished goods. Also known as Work-In-Process (WIP).
Inventory - Inventory Control Icon for managing stock levels
Inventory - Inventory Control Related Terms: Inventory Management, Inventory Control System, Stock Levels, Holding Costs What is Inventory Control? The process of managing a company's inventory levels to ensure that the right amount of stock is available to meet demand while minimizing holding costs.
Inventory - Inventory Control System Icon for tracking inventory
Inventory - Inventory Control System Related Terms: Inventory Control, Inventory Management, Software, Asset Tracking What is an Inventory Control System? A technology solution (software, hardware, or methodology) that tracks inventory levels, orders, sales, and deliveries to manage stock efficiently.
Inventory - Inventory Management Icon for overseeing stock
Inventory - Inventory Management Related Terms: Inventory Control, Supply Chain, EOQ, JIT What is Inventory Management? The process of ordering, storing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products.
Inventory - Inventory Valuation Methods Icon explaining stock costing
Inventory - Inventory Valuation Methods Related Terms: FIFO, LIFO, Weighted-Average Method, COGS, Inventory What are Inventory Valuation Methods? The techniques businesses use to determine the cost of goods sold and the value of ending inventory, including FIFO, LIFO, and weighted-average cost.
Inventory - Just-in-Time (JIT) Icon for efficient inventory system
Inventory - Just-in-Time (JIT) Related Terms: Inventory Management, Lean Manufacturing, Supply Chain, Inventory Costs What is Just-in-Time (JIT)? An inventory management system where materials are received only as they are needed in the production process, reducing inventory costs.
Inventory - Last-In, First-Out (LIFO) Icon for inventory valuation
Inventory - Last-In, First-Out (LIFO) Related Terms: Inventory Valuation Methods, FIFO, COGS, Ending Inventory, IFRS What is Last-In, First-Out (LIFO)? An inventory valuation method that assumes the last units purchased are the first ones sold. (Note: LIFO is not permitted under IFRS).
Inventory - Raw Materials Icon showing basic production inputs
Inventory - Raw Materials Related Terms: Inventory, Manufacturing, Work in Process, Cost of Goods Sold What are Raw Materials? Basic substances in their natural, modified, or semi-processed state, used as inputs in the production or manufacturing of goods.
Inventory - Weighted-Average Method Icon for inventory costing
Inventory - Weighted-Average Method Related Terms: Inventory Valuation Methods, FIFO, LIFO, COGS, Average Cost What is the Weighted-Average Method? An inventory valuation technique that calculates the average cost of all units in stock to determine the value of inventory and cost of goods sold.
Icon representing partially completed goods in inventory.
Inventory - Work in Process (WIP) Related Terms: WIP, Goods-In-Process, Work in Progress What is Work in Process (WIP)? A company's partially finished goods waiting for completion and sale, or the value of these items. Includes costs of raw materials, labor, and overhead.
Icon representing unfinished goods in the manufacturing cycle.
Inventory - Work in Progress (WIP) Related Terms: WIP, Work-In-Process, Goods-In-Process What is Work in Progress (WIP)? Refers to the value of partially completed goods in manufacturing. Often used synonymously with Work in Process.
Icon comparing Work in Process and Work in Progress terms.
Inventory - Work in Process vs. Work in Progress Related Terms: WIP, Goods-In-Process, Inventory What's the difference? Though often used as synonyms for partially completed inventory, 'Work in Process' usually means manufactured goods, while 'Work in Progress' can also apply to unfinished projects or services.
Icon representing a bill or invoice document
Invoice Related Terms: Bill, Sales Invoice, Statement What is an Invoice? A commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer.
Icon representing a list of deductible expenses
Itemized Deduction Related Terms: Specific Deduction, Schedule A Deduction What is an Itemized Deduction? Specific expenses that taxpayers can claim on their tax returns to reduce their taxable income, instead of taking the standard deduction.

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