Intermediate Accounting Solution Key Terms

Learn more about intermediate accounting solutions for business
By Terri Deno Intermediate accounting solutions are vital for individuals or businesses that have a lot of financial assets and liabilities. Intermediate accounting solutions can assist in working with inflation to make better investments and also help to organize the day-to-day accounting issues of a company's assets. This helps to protect a business when it is time to complete tax forms or face any type of financial audit. Intermediate accounting solutions can come through software or through a financial consultant company.
 

Hedge

Hedging in finance is the position an individual or company takes in order to help offset risk in an investment. Hedging offers businesses the chance to minimize risks while maximizing profits. Hedging is often used in a smaller capacity to offset the cost of future inflation.
Try: Investopedia offers a Beginner's Guide to Hedging that explains what the concept is and how it is carried out.

Inflation

Inflation is the general rise in prices paid for general goods and services by consumers. Inflation is often unpredictable but can be due to a rise in production costs.
Try: The United States Department of Labor offers a variety of statistics that are monitored and can help to explain inflation in specific sectors of the economy.

Income statement, profit and loss statement

An income statement, sometimes referred to as a profit and loss (P&L) statement, is vital for any business using an intermediate accounting solution. The income statement is the statement that provides information on what a company has made in terms of revenue in contrast to any losses that occurred in the year.
Try: Accounting Coach offers information on how an income statement looks and what types of information is included in this type of statement.

Balance sheet

A balance sheet is similar to a profit and loss statement in that it includes the profits and losses for the year. But the balance sheet of a business also includes all equity, assets or liabilities the company holds, giving a total picture of the company's assets.
Try: VA Interactive offers information on preparing a balance sheet and also offers a sample balance sheet for reference.

LIFO, FIFO

LIFO (last in, first out) and FIFO (first in, first out) are two types of accounting methods used to manage inventory and other financial holdings of a company. FIFO refers to the system of accounting where the oldest inventory items are moved out first. LIFO refers to the method where the newest inventory for a company is sold first. Intermediate accounting solutions can offer assistance in managing these methods.
Try: Bella Online offers a guide that explains the difference between FIFO and LIFO.

Depreciation allowable

Depreciation allowable refers to the type of assets or liabilities that can be depreciated. Many businesses rely on specific depreciations to spread the initial cost of assets over a set number of years.
Try: Small Business Notes explains how to determine depreciation allowable on one of the most common assets for businesses: the company car.