Accounting profit refers to the amount of profit calculated using generally accepted accounting principles (GAAP) rather than tax rules. It represents the revenue for an accounting period less the expenses incurred, utilizing the concept of accrual accounting. There are several theoretical and practical challenges in determining this profit, leading to a certain variability in its measure.
Average Revenue is the amount of money received by a firm per unit of output sold. It is calculated by dividing the total revenue by the quantity of goods sold.
A credit balance is an accounting term that refers to the situation where the total of credit entries in an account exceeds the total of debit entries. These balances typically represent revenue, liabilities, or capital.
A credit entry is made on the right-hand side of an account, representing an increase in a liability, revenue, or equity item, or a decrease in an asset or expense.
A customer is an individual or entity that purchases goods or services from a business or organization. Customers are the primary source of revenue for businesses and play a critical role in the success and growth of any company.
An essential accounting term used in double-entry bookkeeping to record increases in assets or expenses and decreases in liabilities, revenues, or equity.
Economic Life refers to the period during which a machine or other property is expected to generate more revenue than operating expenses, thereby staying profitable and justifying its use.
Economic value is the present value of future cash flows expected to be generated by an asset. It provides a measure of the worth of an asset considering its future income and cost streams.
A government budget outlines the anticipated annual expenditures and revenue for goods and services, offering a financial framework for policy implementation and national economic health.
Gross Income refers to the total earnings from all sources before any deductions or taxes. It encompasses income from employment, self-employment, rental property, alimony, child support, public assistance payments, and retirement benefits.
Gross margin represents the percentage of total sales revenue that a company retains after incurring the direct costs associated with producing the goods and services it sells. It is a critical metric for assessing a company's financial health and operational efficiency.
The gross margin ratio, also known as the gross profit percentage, is a financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold (COGS). It is a critical indicator of a company's financial health and its ability to manage production costs.
Gross Profit Margin is a financial metric used to assess a company's financial health and its efficiency in generating profit from revenue. It represents the percentage of revenue that exceeds the cost of goods sold (COGS).
Investment software is a computer program designed to track and manage investments in shares, cost, and revenue. These programs often include price and dividend histories of securities, enabling users to make comparisons with major market indicators and analyze tax ramifications of investment decisions.
Marginal revenue is the additional income that accrues to an organization as the result of selling an extra unit of sales. It is a critical metric for businesses in understanding the profitability impact of their incremental sales decisions.
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.
The net margin ratio, also known as the net profit percentage, measures how much of each dollar of revenue earned by a company translates into actual profit after all expenses are deducted.
Net Profit Margin is a financial metric that indicates the percentage of profit a company makes for every dollar of revenue after accounting for all expenses, including taxes.
Payload refers to the cargo or freight that produces revenue or income, typically measured by weight. It encompasses merchandise transported by carriers for profit, including returned merchandise that does not result in additional trips.
Profit margin is a measure of profitability that calculates how much of every dollar earned by a company winds up as profit. It is critical for assessing the efficiency and performance of a company.
Recognition is the procedure used to incorporate an accounting item into the financial statements of an organization. This process is not only essential for capturing revenue and expenditure items but has also become increasingly crucial for the proper treatment of off-balance-sheet finance.
The relevant range is the range of activity levels within which valid conclusions about cost behaviors and break-even points can be drawn from linear cost functions. Outside this range, the assumptions of linear relationships between costs and revenue may not hold true.
Revenue is the total income generated by an entity from its main operating activities. It is a key indicator of financial performance and forms the base upon which profit and loss are calculated.
Revenue evaporation is a significant drop in income from the sale of a product or service, often due to fundamental changes in the market, such as technological innovations.
Sales price refers to the amount of money required to be paid or previously paid for property or a product. It is a crucial concept in business transactions, determining the financial outcome of sales activities.
Sales revenue is the income generated from the sale of goods or services by a company. It is a key determinant of a company's financial health, and it is crucial for assessing growth potential and earning assessments.
Segment margin is a profitability measure used to evaluate the financial performance of a business segment, such as a division, territory, or product line. It equals segmental revenue minus related product costs and traceable operating expenses attributable to that segment.
The shutdown point represents the output price level at which a firm's revenues exactly cover fixed costs. Below this price level, a firm's losses would be minimized by ceasing operations as continued production would generate greater losses.
Stock turnover, also known as inventory turnover, is a financial ratio that measures how many times a company's inventory is sold and replaced over a specific period.
Stock-in-trade refers to the merchandise or goods available to a business for sale to customers. It is integral to a company's operations and directly impacts revenue.
Total Revenue is the overall income generated by a company from its business activities, typically from the sale of goods and services, before any expenses are subtracted.
A trading account, crucial in financial accounting, involves comparing the cost of sales with the revenue generated to determine the gross profit within a profit and loss account.
Unearned income or revenue is income received by a business but not yet earned. It is typically classified as a current liability on a company's balance sheet.
A Value-Added Tax (VAT) is a type of indirect tax levied on goods and services at each stage of production or distribution where value is added. It is prevalent in many countries worldwide and represents a significant source of revenue for governments.
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