What is an Income Statement? Definition: Income statement, also known as profit and loss statement, is a report that shows how a company or business performed, financially, over a given accounting period. The report offers insights on the revenue generated as well as expenses incurred and net income or loss. Income statement is one of
What is the Going Concern Assumption? Definition: The going concern assumption is an accounting principle that states a business should be viewed as if it will continue to operate into the future. When a business opens its doors to the public, the common assumption is that it will remain open for the longest time possible,
What is International Trade? Definition: International trade is an economy’s ability to exchange goods and services in exchange for value, usually monetary and the circulation of resources across borders. How Does International Trade Work? International trade happens when countries trade with each other so that a c important not only for traders but also for
What is Inelastic Supply? Definition: Inelastic supply is one of the concepts within the law of supply and demand. Inelastic supply refers to an economic situation where price changes do not affect the amount of products that producers are able and willing to produce. What does it mean to have inelastic supply? The elasticity of
What is an Implicit Cost? Definition: An implicit cost refers to any opportunity cost that a firm incurs when its internal resources are used for a project but only when the project does not offer compensation for the committed resources. It is considered an opportunity cost because the company puts its resources into a non-paying
What is Lean Business Model? Definition: A lean business model is a business strategy that focuses on eliminating waste in operations and production process. The strategy entails integrating lean concepts in operations with a view of reducing waste and improving the quality of products. A lean business model goes a long way in fostering a
What is the Income Approach? Definition: The income approach is a popular concept in both finance and economics. In finance, the income approach is a tool that helps appraisers to determine the value of an income-generating asset. On the other hand, economists use the income approach to determine the gross domestic product (GDP) of a
What is the Gift Tax? Definition: The gift tax is the tax applied to any valuable gift either money or property that an individual can give another person. Technically a gift tax will apply to almost every gift that you may give someone provided they do not pay you back in full. Therefore if you
What is the Income Summary Account? Definition: Income summary is a special type of financial account whereby balances of revenue and expenses for a given accounting period are transferred. Being a summary account, it is designed to receive all temporary accounts made up of revenues and expenses at the end of each accounting period. In
What are Gross Wages? Definition: Gross wages are you overall earnings from your employer before any type of payroll deductions. What comes to mind when someone says to you, ‘your gross salary is X amount of money?’ Well, a majority of people just walk away in content and perhaps without getting down to the details