会计概念英文名词解释.docx

Session 1 Definitions and Elements of Financial Statements You will need to learn these underlined terms for the midterm! Income statement – “video” of revenues, expenses, gains, losses over a period of timeBasic definitions:Revenue –increase in equity (and associated increase in assets and/or decrease in liabilities) earned from the sale of goods or provision of services to customers; it is measured on a gross basis as the amount of assets to be received. Expense – decrease in equity (and associated decrease in assets and/or increase in liabilities) created by sale of goods, rendering of services or passage of time; it is measured on a gross basis as the amount of assets consumed. Gain – increase in equity resulting from selling assets or recognizing the increase in value of assets (or decrease in value of liabilities); it is measured on a net basis as the positive difference between current value and amount recorded on the balance sheet.Loss – decrease in equity resulting from selling assets or decrease in value of assets (or increase in value of liabilities); it is measured on a net basis as the negative difference between current value and amount recorded on the balance sheet.Accounting period - the time period between consecutive balance sheets for which a firm prepares an income statement and statement of cash flows (e.g., an annual report has a 12-month accounting period and a quarterly statement has a 3-month accounting period).Elements:Sales - revenue from selling goods or providing services to customers, which is reported as the top line on the income statement. Cost of Goods Sold or Cost of Sales labor, material, and overhead costs directly related to providing goods or services.Gross Profit is the difference between Sales Revenue and Cost of Goods Sold, which represents the profit that is available to cover all of the other expenses on the income statement.Operating Expenses are expenses related to the ordinary operating activities of the firm of provi