Accounting Dictionary - Letter I

• Income: The amount of money earned by a person or business from various sources, such as salaries, wages, or investments.
• Invoice: A document that shows the amount of money owed by a customer to a seller for goods or services.
• Inventory: The goods or materials that a business has on hand for sale or use in production.
• Interest: The cost of borrowing money, expressed as a percentage of the principal amount borrowed.
• Investment: An asset or item that is purchased with the expectation of earning a profit or generating income.
• Impairment: A decrease in the value of an asset due to damage, obsolescence, or other factors.
• Income statement: A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.
• Internal control: A system of policies, procedures, and controls that are designed to ensure the accuracy and reliability of a company's financial statements.
• Indirect costs: Costs that are not directly related to the production or sale of a product or service.
• Insolvency: The inability of a person or business to pay its debts.
• IRS (Internal Revenue Service): The U.S. government agency responsible for collecting taxes and enforcing tax laws.
• IFRS (International Financial Reporting Standards): A set of accounting standards that are used by companies in many countries to prepare their financial statements.
• IASB (International Accounting Standards Board): The organization that is responsible for developing and issuing IFRS.
• Installment: A payment made on a loan or other debt, often used to describe a payment plan.
• Intangible assets: Assets that are not physical in nature, such as patents, copyrights, or trademarks.
• Initial public offering (IPO): The first sale of a company's stock to the public.
• Inflation: A sustained increase in the general price level of goods and services in an economy.
• Insurance: A contract that provides financial protection against loss or damage.
• Internal audit: An examination of a company's internal controls and financial statements by an independent auditor.
• Internal rate of return (IRR): The rate of return on an investment, calculated by comparing the initial investment to the expected future cash flows.
• Interim financial statement: A financial statement that is prepared for a period of time that is shorter than a full year.
• Income tax: A tax on an individual's or business's income.
• Itemized deduction: A deduction from taxable income that is allowed for specific expenses, such as charitable donations or medical expenses.
• Inventory turnover: The number of times that a company sells and replaces its inventory in a given period of time.
• Intracompany transaction: A transaction between two or more companies that are owned by the same parent company.
• Inflow: The movement of money or assets into a company or account.
• Intercompany: A transaction or relationship between two or more companies that are owned by the same parent company.
• ITIN (Individual Taxpayer Identification Number): A unique number assigned to an individual by the IRS for tax purposes.
• Incidental expense: An expense that is not directly related to the production or sale of a product or service.
• Incentive: A payment or reward that is made to motivate employees or other individuals to achieve specific goals or objectives.
• Incorporation: The process of forming a corporation, which involves filing articles of incorporation with the state and obtaining a charter.
• Incremental cost: The additional cost of producing one more unit of a product or service.
• Indemnity: A payment or compensation that is made to an individual or company for losses or damages.
• Index fund: A type of investment fund that tracks the performance of a specific stock market index.
• Indirect labor: Labor costs that are not directly related to the production or sale of a product or service.
• Indirect material: Materials that are not directly used in the production or sale of a product or service.
• Individual retirement account (IRA): A type of savings account that is designed to help individuals save for retirement.
• Inheritance tax: A tax on the transfer of assets from one person to another, often used to describe a tax on inheritances.
• Input tax: A tax on the inputs or raw materials used in the production of a product or service.
• Insolvent: Unable to pay debts or meet financial obligations.
• Intangible: An asset or item that is not physical in nature, such as a patent or trademark.
• Integration: The process of combining two or more companies or organizations into a single entity.
• Interperiod tax allocation: The allocation of taxes between different accounting periods.
• Intrinsic value: The true or inherent value of an asset or investment.
• Investment banker: A professional who helps companies raise capital by issuing stocks or bonds.
• Investment tax credit: A tax credit that is allowed for investments in certain types of assets or projects.
• Invoice date: The date on which an invoice is issued or sent to a customer.
• Invoice number: A unique number assigned to an invoice for tracking and identification purposes.
• Irrevocable trust: A trust that cannot be changed or terminated once it is established.
• Issued shares: The number of shares of stock that have been issued by a company to its shareholders.
• Imprest system: A system of accounting that involves the use of a petty cash fund to pay for small expenses.
• Imputed interest: Interest that is assumed to have been earned on an investment or loan, even if it is not actually paid.
• In-kind contribution: A contribution of goods or services rather than cash.
• Income smoothing: The practice of manipulating a company's income to make it appear more stable or consistent.
• Income splitting: The practice of dividing income between two or more individuals or entities to reduce taxes.
• Incomplete records: Financial records that are missing or incomplete, often used to describe a situation where a company's financial statements are not accurate or reliable.
• Incorporeal rights: Rights that are not physical in nature, such as patents or copyrights.
• Indenture: A contract or agreement that outlines the terms and conditions of a loan or other financial obligation.
• Indirect method: A method of accounting that involves estimating costs or revenues based on indirect measures, such as labor hours or material usage.
• Insider trading: The practice of buying or selling securities based on confidential or inside information.
• Insurable interest: An interest in a property or asset that is protected by insurance.
• Integrated accounting: A system of accounting that combines financial and management accounting information.
• Interdepartmental transfer: A transfer of goods or services between different departments within a company.
• Interest coverage ratio: A ratio that measures a company's ability to pay its interest expenses.
• Intermediary: A person or company that acts as a middleman or agent in a transaction.
• International accounting: A system of accounting that is used by companies that operate in multiple countries.
• Intra-period tax allocation: The allocation of taxes within a single accounting period.
• Inventory shrinkage: A decrease in the value of inventory due to theft, damage, or other factors.
• Inventory valuation: The process of determining the value of inventory for financial reporting purposes.
• Investment center: A department or division within a company that is responsible for making investment decisions.