Net income results when revenues exceed expenses. A net loss occurs when expenses exceed revenues.
More from this Section
- Inventory turnover
Inventory turnover is a ratio that measures the number of times on average the inventory is sold during the period. Its purpose is to measure the liquidity of the inventory.
- Cost of goods manufactured
Cost of goods manufactured refers to the total cost of work in process less the cost of the ending work in process inventory.
- Raw materials inventory
Raw materials inventory is a general ledger account. It is also referred to as a control account because it summarizes the detailed data regarding specific inventory...
- Cash budget
The cash budget is a projection of anticipated cash flows. Because cash is so vital, this budget is often considered to be most important financial budget.
- Error of omission
An error of omission is one where a transaction has not been recorded in the books of account either wholly or partially. In the
- Payment date
On the payment date the company mails dividend checks to the stockholders and records the payment to the dividend.
- Straight-line method of amortization
Straight-line method of amortization is a method of amortizing bond discount or bond premium that results in allocating the same amount to interest expense in each interest period.