1The amount of net income a firm generates, relative to total revenues.

2The extent to which a company's earnings are relevant and faithful representations of financial performance for the current period and enable financial statement users to develop reasonable expectations of future earnings.

3A method a company uses to report the operating activities section of the statement of cash flow where net income is adjusted (reconciled) to its net cash flow from operating activitiesnet income is listed and then adjustments (additions or subtractions) are made to net income.

4Transactions that involve acquiring and selling productive assets and investments needed to achieve the operating objectives of the business.

5A corporation's net income for a period of time is the amount that it could distribute to shareholders without depleting the capital the shareholders have invested; the amount of money that can be distributed to shareholders as a return on capital, without being a return of capital. Concept asserts that capital must be maintained before a corporation earns income on that capital.

6The cost of the inventory items sold to customers during the period.

7For the statement of cash flows, a method a company uses to report the operating activities section of the statement of cash flows by computing operating cash inflows and deducting operating cash outflows to determine its net cash flow from operating activities. For inventory, a method to record the write-down of inventory from cost to market in which the loss is recorded directly by reducing the company's inventory account and increasing its cost of goods sold account.

8The amount of consideration the entity expects to be entitled to for providing goods or services to the customer.

9A presentation of the income statement in which income from continuing operations is presented in a single step, in which all operating expenses and losses are subtracted from all revenues and gains.

10Calculated as net income minus preferred dividends divided by weighted average number of common shares outstanding.

11When a company reports net income on a per-share basis.

12Measures the profitability of the company relative to the amount of equity capital invested by the common shareholders. Calculated as: Net Income Average Common Equity = Return on Common Equity

13Section of the income statement that reports the company's income from ongoing, recurring business activities; includes operating income plus (or minus) income items associated with financing and investing activities (such as interest expense and interest income); gains and losses that are not part of normal, ongoing operating activities; and income taxes.

14A component of a company that engages in business activities to earn revenues and incur expenses, generates operating results regularly reviewed by the company's chief operating decision maker to make decisions about allocating resources to the segment and assessing its performance, and has discrete financial information available.

15The amount of debt financing relative to a company's equity and total assets.

16A presentation of the income statement in which income from continuing operations is presented using various categories and subtotals.

17A major component or segment of a business that the firm has decided to shut down or sell.

18Part of the day-to-day business activities of a companyacquiring (purchasing or manufacturing), selling, and delivering goods and services to customers.

19Contingent claims on common equity (such as stock options, warrants, or convertible debt) that, if exercised, would dilute the value of existing common equity shares.

20An operating segment of a company whose operations are significant enough that its financial activities must be reported separately