Prepaid Expenses

Prepaid expenses are payments made for expenses which have not yet been consumed.  Because prepaid expenses reflect goods or services which are owed to the […]

Preferred stock is a class of stock that has preference over common stock in respect to dividends and liquidation proceeds.  Preferred stock generally pays a […]

Paid-in capital refers to the amount of monetary capital that shareholders have contributed to the company.  Paid-in capital is one of the two main sources […]

Other revenue is a classification for revenue produced from sources outside of the company’s normal operations.  Other revenue is disclosed as a separate line item […]

Owners’ equity is the portion of a company’s balance sheet which represents the shareholders’ claim on the assets of the business.  Owner’s equity is calculated […]

Outstanding stock refers to the number of common stock shares that are in the hands of shareholders.   When a corporation is formed, one of the […]

A note receivable is a loan which a company has extended via a formal written agreement.   Because a note receivable represents funds owed to the […]

Operating income refers to the income derived from the firm’s normal business activities.  Operating income excludes interest expense, since interest expense is a financing cost […]

A company’s operating cycle is the number of days, on average, between the acquisition (or production) of inventory and the eventual sale of that inventory.  […]

Net income refers to a company’s revenues less all expenses.   Net income is also called net profit. A company generates a net profit when its […]