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Accounting Terminology

Icons: As used in computer terminology, icons are images or graphics used to represent actions or computer processes. A trash can might be an icon for deleting a file, a picture of a house might indicate moving back or to the main or home page, and a pen might indicate a word processing package.

Impersonal Accounts: These are accounts not held in the name of persons (i.e. they do not relate directly to a business's customers and suppliers). There are two types, see Real and Nominal.

Imprest Account: An account into which a fixed amount of money is placed for minor disbursements or disbursements for a specific purpose (e.g., payroll).

Imprest System: A method of topping up petty cash. A fixed sum of petty cash is placed in the petty cash box. When the petty cash balance is nearing zero, it is topped up back to its original level again (known as 'restoring the Imprest').

Income: Money received by a business from its commercial activities. See 'Revenue'.

Income Accounts: These are the accounts you use to keep track of your sources of income. Examples are merchandise sales, consulting revenue, and interest income.

Income Statement: (Also called Statement of Earnings) The financial statement that summarizes the revenues generated and the expenses incurred by an entity during a period of time. It shows whether the business earned a profit or incurred a loss for a given period.

Inland Revenue: The government department usually responsible for collecting your tax.

Insolvent: A company is insolvent if it has insufficient funds (all of its assets) to pay its debts (all of its liabilities). If a company's liabilities are greater than its assets and it continues to trade, it is not only insolvent, but in the UK, is operating illegally (Insolvency act 1986).

Intangible assets: Assets of a non-physical or financial nature. An asset such as a loan or an endowment policy are good examples. See tangible assets.

Integration Account: See Control Account.

Interest: The payment (cost) for the use of money.

Interest Rate: the cost of using money, expressed as an annual percentage.

Interest Revenue: Money earned from an investment can be interest revenue.

Inventory: (1) A detailed a detailed list showing quantities, descriptions and values of property and, frequently, units of measure and unit prices. (2) An asset account reflecting the cost of goods held for resale or for use in operations.

Invoice: A term describing an original document either issued by a business for the sale of goods on credit (a sales invoice) or received by the business for goods bought (a purchase invoice).