Accounting Definitions (Income) and Accounting Definitions (Expenses) - H
Historical Cost – This is an accounting term to denote actual price or costs paid in procuring or booking an asset of the company.
Holding Costs - Charge imposed by the carrier of goods for providing docking services to the shipper of the goods.
Imputed Interest – The amount that increases the present value of the note or bond from its original value. The difference is considered as the imputed interest as it was already added in the computation of final amount paid as debt settlement.
Income – Gain or profit realized through trading activities, whether by reselling goods purchased at wholesale prices or by manufacturing the goods sold to the resellers or distributors.
Income Account – The generic term used to classify a transaction in the general ledger books or in the financial statement to denote that the amount reported is a revenue item.
Income Statement – The financial report that discloses the results of the business operations by presenting the total gross receipts and the total expenses incurred whether directly (cost of goods sold) or indirectly (administrative and operating expenses), in order to arrive at the net income or net loss for the period indicated as the statement date.
Income Tax – See Federal Income Tax
Installment Sale – Goods sold on credit for which a partial payment has been received and the remaining amount shall be settled in a series of payments. This is all in accordance with the terms and conditions stipulated by the seller and to which the buyer agrees.
Insurance – The assurance of a company that an individual or group of individuals or a business entity will be reimbursed for losses that resulted from bodily harm, injury, or death, or from theft, burglary, damages, or destruction of property. Such assurance will prevail for as long as they are covered by a policy governed by the terms and conditions stipulated by the insurance company and that the insured does not violate any of those conditions. The latter includes the payment of premiums by the person/s whose body/bodies or property/properties are protected.
Interest Expense – The cost of borrowing funds from a financing institution or credit company to compensate the opportunity lost had the lender invested the money in a more secured form of investment.
Interest Rate – The percentage by which an interest expense or income is computed, but it is regulated by law; hence, it should not exceed the ceiling stipulated as the maximum rate.
Interim Financial Statement – This refers to a financial report prepared within an accounting cycle, usually for management’s purposes, and does not require the closing of the general ledger book as part of its preparation.
Internal Revenue Service (IRS) – The authorized US government agency in charge of administering all tax rules and regulations, including collections and assessments, to determine if the taxes are being paid correctly and / or dutifully.
Internal Service Fund -- In government accounting, this is the amount set-up as a provision to meet the expenses specified in the approved budget allocation of a government agency, arm, office, or unit. All expenses incurred to carry out their respective governmental functions or services are all paid by way of reimbursements duly supported by documents considered as valid.
Itemized Deductions – These represent the amount allowed as reductions against the gross income of a taxpayer in order to arrive at the Adjusted Gross Income for tax payment or filing purposes; they should be provided with details and supported by receipts, inasmuch as their validity is subject to review and/or assessment by the IRS.
Levy – Tax or duty to pay a certain amount as provided under the taxation rules and regulations of the Internal Revenue Code.
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