net asset value: The difference between an asset's value on the balance sheet less any associated contra asset account. EX: If the accounts receivable value is $100,000 and the allowance for doubtful accounts has a credit balance of $30,000, then the net asset value of the receivables is $70,000. net income: The bottom-line figure on the income statement; the difference between revenues and expenses. Net income increases owners' equity (while net loss decreases owners' equity) net loss: When expenses are greater than revenues. net operating income (NOI): Income from operations (gross profit less operating expense); excludes discontinued operations, extraordinary items, and non-operating items such as interest expenses, investment income, gain, and losses. net pay: Gross pay less deductions (withholdings). net sales: Sales revenue less sales returns and allowances less sales discounts. noncumulative preferred stock: Preferred stock that does not require past unpaid dividends to be paid before a dividend can be paid to common stock holders. noncurrent assets: Resources that the firm expects to convert to cash, use or consume in a period greater than one year or one operating cycle, whichever is longer. noncurrent liabilities: Obligations that are due after one year or one operating cycle, whichever is longer. normal account balance: The side of the ledger a balance normally resides on (either the debit or credit side). Asset accounts and expense accounts normally have debit balances. Revenues, liabilities, and stockholders' equity accounts normally have credit balances. notes payable: A written promise signed by the maker of the note to pay a certain sum of money, either on demand or at a future date. The negotiable instrument ( the note) may or may not bear a rate of interest, although most notes payables are evidenced by a promissory note that calls for interest. notes receivable: A written promise usually signed by a customer, to pay a specified amount at a certain time and usually with some interest owned. notes to financial statements: often called footnotes, these comments provide additional information pertaining to a company's operations and financial position. objectivity: A principle of accounting that states the accountant must generate information that is fair, unbiased, and objective. obsolesce: The process of assets becoming outdated or economically unfeasible to use; can be caused by technology advances. EX: Computers that are 10 years old may still carry out all functions but become obsolete because they are slow compare to newer computers. officers: Staff of a corporation that are appointed by the board of directors to carry out the policies established by the bard of directors. EX: The officers of a corporation include the chief executive officer (CEO), chief operations officer (COO), chief financial officer (CFO), vice presidents, and controller. operating cycle: the length of time it takes a company to generated and collect cash from its operations and how ling it takes to convert inventory to cash. operating expenses: Cost incurred in carrying out an organization's day-to-day activities, including payroll, sale commission, employee benefits and pension contributions, transportation and travel, rent amortization and depreciation, repairs, and taxes. Operation expenses are usually subdivided into selling expenses and administrative and general expenses operating income: Net sales less cost of goods sold less operating expenses. operating lease: A lease that does not meet any of the four criteria for a capital lease established by GAAP. It does not require the recording of an asset and a liability. The operating lease payment is an operating expense. operating loss: A loss before non-operating or other items are accounted for on the statement of income. ordinary annuity: A series of equal amount of cash flow occurring at the end of each period. ordinary repairs: Expenditures that only help maintain the productive capacity of the asset during the current accounting period. Ordinary repairs are an operating expense. outstanding shares: The total umber of shares owed by stockholders as of a specific date. owners' equity: Owners' investment in a company. For a corporation owner's equity is usually divided into four subcategories: capital stock at the par or stated value, additional paid-in capital or amounts paid over par, retained earning, and treasury stock (negative equity).