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imprest petty cash fund: A petty cash fund in which all expenditures are documented by vouchers or vendors' receipts or invoices, the total of the vouchers and cash in the fund should equal the established balance.

income statement (statement of earnings): The financial statement that summarizes the revenues generated and the expenses incurred by an entity during a period of time.

income taxes payable: The amount expected to be paid to the federal and state governments based on the income before taxes reported on t he income statement.

independent checks: Procedures for continual internal verification of other controls.

indirect method: A method of reporting net cash flow from operations that involves converting accrual-basis net income to a cash basis.

inflation: An increase in the general price level of goods and services; alternatively, a decrease in the purchasing power of the dollar.

intangible assets: Long-lived assets without physical substance that are used in business, such as licenses, patents, franchises, and goodwill.

intercompany transaction: A transaction between a parent company and a subsidiary company.

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

interest rate: The cost of using money, expressed as an annual percentage.

internal auditors: An independent group of experts in controls, accounting, and operations, who monitor operating results and financial records, evaluate internal controls, assist with increasing the efficiency and effectiveness of operations, and detect fraud.

internal control structure: Safeguards in the form of policies and procedures established to provide management with reasonable assurance that the objectives of an entity will be achieved.

inventory: Goods held for resale.

inventory cutoff: The determination of which items should be included in the year-end inventory balance.

inventory turnover ratio: A measure of the efficiency with which inventory is managed; computed by dividing cost of goods sold by average inventory for a period.

investing activities: Transactions and events that involve the purchase and sale of securities (excluding cash equivalents), property, plant, equipment, and other assets not generally held for resale, and the making and collecting of loans.

issued stock: Authorized stock originally issued to stockholders; it may or may not still be outstanding.

itemized deduction: Amounts paid by an individual taxpayer for personal and quasi-business expenses that can be deducted in computing taxable income, such as medical expenses, property and income taxes, mortgage and investment interest, charitable contributions, moving expenses, casualty and theft losses, and certain miscellaneous expenses.  

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