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Income statement: This refers to a business/organization’s financial statement, which is used to record money received from sales, the expenses incurred to make the sales, and the subsequent income from sales activities. P&L is a common abbreviation used to refer to the income statement (Tax and Accounting Acronyms, 2008).

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Gross profit: Gross profit refers to the amount of money received from the sale of goods after deduction of the total cost of goods sold. GP is a common abbreviation used to refer to gross profit (Tax and Accounting Acronyms, 2008).

Net profit: This refers to the difference between gross profit and the total of operating expenses, which may include transportation and distribution costs, warehouse charges, sales commission,salespersons’ salaries, depreciation for fixed assets used in the business, and advertisement costs. Operating profit is used to refer to net profit (Tax and Accounting Acronyms, 2008).

Net income: Net income refers to the difference between net profit and the total of other business expenses, which include interest to borrowed capital and government taxes (Tax and Accounting Acronyms, 2008).

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EBIT: EBIT is a common acronym in accounting, which refers to earnings before interest and taxation. It is used in preparation of income statement to report actual earnings without putting into consideration the effects of accrual basis of accounting, government taxation, and the effects of various working capital arrangements (Tax and Accounting Acronyms, 2008).

GAAP is an accounting acronym, which means Generally Accepted Accounting Principles. GAAP is a set of rules, standards, and principles that accountants, in any given field, follow when recording and preparing financial statements. The commonly used principles include principle of materiality, principle of prudence, principle of consistency, principle of continuity (going-concern), and principle of regularity (Tax and Accounting Acronyms, 2008).

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From a personal perspective, it is important to use appropriate career-based terminologies while conducting professional communication because it helps one to identify with his/her profession. In addition, one can be acquainted with the various terminologies used in a specific career field and hence achieve greater understanding of their uses in the profession.

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