1,000+ Accounting Terms

Accounting

Terms and Definitions

Glossary of Accounting Terms

Popular Terms

Accelerated Depreciation

A method of depreciation that allows for greater depreciation expense in the early years of an asset's life and less in the later years, compared to straight-line depreciation.

Accumulated Depreciation

The total depreciation recorded for an asset or group of assets from the time they were placed in service until the date of the financial statement or tax return. This amount is recorded as a contra account to the related asset account, reducing the asset's book value on the balance sheet.

Alternative Minimum Tax (AMT)

A federal tax designed to ensure that individuals, estates, trusts, and corporations with significant economic income pay a minimum level of income tax, regardless of deductions, exemptions, or other tax breaks they may otherwise be able to claim.

Appreciation

An increase in the value of an asset, such as a stock, bond, commodity, or real estate, over a period of time.

Bankruptcy

A legal process governed by federal statute in which an insolvent debtor's assets are liquidated and managed by a court-appointed trustee to satisfy debts to the greatest extent possible.

Bond

A bond is a type of long-term promissory note, issued as a security under federal or state laws, where the issuer borrows funds from the bondholder and agrees to pay back the principal amount at a specified maturity date, along with periodic interest payments.

Book Value

The net amount that an asset or liability is recorded on the balance sheet, also known as the carrying value. It is calculated by deducting accumulated depreciation, amortization, or impairments from the original cost of the asset.

Boot

In financial and tax contexts, 'boot' refers to any additional cash or property added to a transaction to balance the value of exchanged properties, typically in transactions that are otherwise nontaxable.

Capital Expenditure

An outlay of money to acquire or improve long-term assets such as buildings, machinery, or equipment, which are intended to be used in the operations of a business and are not intended for resale.

Capital Gain

A capital gain is the profit realized from the sale or exchange of a noninventory asset, such as stocks, real estate, or other investments, where the sale price exceeds the asset's original purchase price. These gains are usually treated favorably under tax laws, often at a lower rate than ordinary income.

Carrying Value

The net amount at which an asset or liability is valued on a company's balance sheet, after accounting for depreciation, amortization, and impairment costs, as well as accumulated liabilities. Also known as book value.

Dealer

An entity or individual that buys and sells securities for its own account, acting as a principal in the transaction. Dealers set bid prices for buying securities and ask prices for selling, thus making markets and taking on the associated risks.

Debt Instrument

A financial document representing a loan made by an investor to a borrower, which includes the terms of repayment and, typically, interest payments.

Debt-to-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. It is calculated by dividing total liabilities by shareholders' equity.

Delaware Statutory Trust

A trust that holds a real property, allowing it to qualify for a 1031 exchange and provide an opportunity for the investor to relinquished management responsibilities.

Depreciation

A non-cash accounting expense that allocates the cost of acquiring long-term assets over their useful life, representing the asset's wear and tear, obsolescence, or other declines in value over time.

Exchanges

The act of transferring money, property, or services in return for a combination of these items.

FIFO

An accounting method of valuing inventory under which the costs of the first goods acquired are the first costs charged to expense, commonly known as First In, First Out.

Face Value

The nominal value of a security or financial instrument as stated by the issuer, which is the amount due to be paid at maturity. It does not fluctuate with market value.

Fair Market Value

The price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.

Fiduciary

A fiduciary is a person or entity who holds a legal or ethical relationship of trust with one or more other parties, typically taking care of money or assets for another person. A fiduciary must act in the best interest of the party whose assets they are managing.

Gain

A financial gain is the profit realized when the revenue received from a transaction exceeds the costs or when a security is sold for more than its purchase cost. The gain represents the difference between the sale price and the original cost.

General Partnership

A business arrangement where two or more individuals, known as general partners, manage the business and are equally liable for its debts and obligations. There are no limited partners in a general partnership.

Goodwill

Goodwill is an intangible asset that represents the premium paid over the fair value of the net identifiable assets (tangible and intangible) and liabilities of an entity during its acquisition.

Hedge

A transaction or series of transactions undertaken to reduce the risk of an investment, often by taking an offsetting position in a related security.

Held-to-Maturity Security

A debt security that a company has the intent and ability to hold until its maturity date, at which point it is expected to be paid in full.

Holding Period

The duration between the acquisition and the sale or disposition of an asset by a taxpayer.

Intangible Asset

An asset that lacks physical substance and is identifiable as a non-monetary asset without physical substance. This includes assets such as patents, trademarks, copyrights, goodwill, and brand recognition.

Interest

The price paid for borrowing money, typically expressed as a percentage rate over a period of time, which compensates the lender for the use of their money and reflects the rate of exchange of present consumption for future consumption.

Internal Rate of Return

The discount rate at which the present value of future cash flows equals the initial investment outlay, used to evaluate the profitability of potential investments.

Intrinsic Value

Intrinsic value refers to the inherent, true value of an asset, determined by fundamental analysis without reference to its market value. It is often calculated using data inputs in a valuation model.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. Each of the participants is responsible for profits, losses, and costs associated with the venture.

Junk Bonds

Debt securities issued by companies with higher than normal credit risk, classified as 'non-investment grade' bonds. These securities typically offer a higher rate of interest to compensate for the increased risk.

Key Employee

In the context of top heavy plans, a key employee is defined as 1) an officer of the employer earning more than $130,000; 2) an individual who owns more than 5 percent of the employer; or 3) an individual who owns more than 1 percent of the employer and has compensation greater than $150,000.

Labor

Physical or mental effort exerted during work or tasks.

Limited Partnership

A business structure where one or more general partners manage the business and are personally liable for partnership debts, while one or more limited partners contribute capital and share profits but their liability is limited to the extent of their investment.

Loan

A financial arrangement in which a lender provides a sum of money to a borrower with the expectation that the borrower will return the amount over a specified period, often with interest.

Long-Term Gain

A profit realized from the sale or exchange of a capital asset held for more than one year, subject to long-term capital gains tax, which is typically lower than the tax on short-term gains.

Long-Term Liability

A debt that falls due more than one year in the future, or beyond the normal operating cycle, and is typically to be paid out of noncurrent assets.

Marginal Tax Rate

The percentage of tax applied to an individual's or entity's income for each additional dollar of income.

Market Value

The price at which an asset would trade in a competitive auction setting, often used to refer to the current price of a stock or bond on the open market.

Materiality

The significance of an omission or misstatement of accounting information that, in the context of surrounding circumstances, could influence the judgment of a reasonable person relying on the information.

Net Asset Value (NAV)

Net Asset Value (NAV) is the market value per share of a mutual fund or an exchange-traded fund (ETF). It is calculated by dividing the total value of all the assets in the portfolio, minus any liabilities, by the number of shares outstanding.

Notes Receivable

Notes receivable are written promissory notes that represent money owed to an entity, typically due within one year, and are recognized as assets on the balance sheet.

Notional

A value assigned to assets or liabilities that is not based on cost or market value, often used in financial contracts to specify the quantities upon which payments are based.

Operating Agreement

A written document that outlines the governance and operational guidelines of a Limited Liability Company (LLC), serving a similar purpose to corporate bylaws or a partnership agreement.

Operating Profit (or Loss)

Operating profit or loss is the difference between a company's revenues and its related costs and expenses, derived exclusively from its regular business activities, before deductions for interest and taxes.

Option

An option is a financial derivative that gives the buyer the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price (strike price) within a specified time period.

Paid in Capital

The portion of stockholders' equity that comes from the capital contributed by investors through the purchase of stock at issuance, excluding any capital generated from earnings or donations.

Principal

The original sum of money borrowed in a loan, or the amount of the investment, exclusive of any interest or dividends. It also refers to the party whose interests are represented by an agent in a principal-agent relationship.

Qualified Intermediary

A Qualified Intermediary refers to a person that acts as an intermediary qualified under certain sections of the U.S. Internal Revenue Code to undertake specified activities.

Qualified Opinion

An audit opinion that states the financial statements are fairly presented in accordance with Generally Accepted Accounting Principles (GAAP), except for the effect of a matter to which a qualification relates, often due to a scope limitation or inability to obtain sufficient appropriate audit evidence.

Quick Ratio

A liquidity metric that measures a company's ability to cover its current liabilities with its most liquid assets, without relying on the sale of inventory.

Retained Earnings

Accumulated undistributed earnings of a company retained for future needs or for future distribution to its owners.

Return on Assets

A financial metric that measures the profitability of a company relative to its total assets, calculated by dividing net income by average total assets. This ratio indicates how efficiently a company is using its assets to generate earnings.

Return on Equity

A financial ratio that measures the profitability of a company in relation to the shareholders' equity, calculated by dividing net income by average shareholders' equity.

Safe Harbor Rule

A provision in statutes and regulations that offers protection from adverse legal action or penalties if specific conditions are met, particularly when a legal requirement is ambiguous or carries a risk of unintended violation.

Sale-Leaseback Transaction

A financial arrangement in which a property owner sells an asset, typically real estate, to a buyer and then leases it back from the buyer. This enables the seller to continue using the asset while converting it into capital.

Separate Entity

A principle in accounting where a business is considered distinct and separate from its owners, creditors, and other businesses, allowing for independent financial and legal transactions.

Short Sale

A financial transaction where an investor sells an asset they do not currently own, typically securities, with the intention of repurchasing them later at a lower price. The investor borrows the asset to make the sale and later buys it back to return it to the lender.

Tax Lien

An encumbrance placed on property as security for unpaid taxes, giving the taxing authority a legal claim against the property until the debt is paid.

Tax Shelter

A tax shelter is a legal arrangement where certain investments or financial decisions are made to reduce, defer, or eliminate tax liabilities.

Transfer Tax

A tax imposed by the government on the transfer of ownership of property, including gifts and estates, as transactions occur.

Unearned Interest

Interest that has been collected on a loan by a financial institution but cannot yet be recognized as earnings because the principal of the loan has not been outstanding for a sufficient period.

Unlimited Liability

A legal obligation where all business owners are personally responsible for all debts of the business, without any limit on the amount for which they are liable.

Variable Costs

Total costs that change in direct proportion to changes in productive output or any other measure of volume.

Variable Rate Loan

A loan whose interest rate changes over its life in relation to the level of an index, allowing for fluctuating payments.

Warrant

A security issued by a corporation that gives the holder the right to purchase a specific amount of stock at a specified price within a certain time frame. Warrants are similar to call options but are issued directly by the company and have longer durations.

Weighted-Average-Cost Method

An inventory costing method used under the periodic inventory system that calculates the cost of ending inventory and the cost of goods sold based on the weighted average cost of all items available for sale during the period.

Yield

The income return on an investment, such as dividends or interest, expressed as a percentage of the investment's cost or current market value.

Yield Curve

A graph that illustrates the relationship between interest rates and the maturities of debt securities of the same credit quality, showing how these rates vary with different maturity dates.

Zero-Coupon Bond

A bond on which the holder receives only one payment at maturity, which includes both the principal and the interest accrued from issuance to maturity.

All Accounting Terms (Alphabetical)

Short-Term

Referring to a time frame that is typically less than one year, often used in financial contexts to describe obligations or assets that are due or expected to be liquidated within that period.

Short-Term Debt

Financial obligations that are due within one year and are classified as current liabilities on a company's balance sheet.

Short-Term Investment

An investment of excess cash intended to be held for a brief period, usually less than one year, to meet upcoming financial obligations or for temporary financial gain.

Significant Accounts

Accounts considered significant if there exists more than a remote likelihood that they could contain misstatements, which individually or in aggregation, could materially affect the financial statements. This assessment considers the risks of both overstatement and understatement.

Significant Deficiency

A control deficiency, or combination of control deficiencies, in a company's financial reporting processes that adversely affects the ability to initiate, authorize, record, process, or report financial data reliably in accordance with Generally Accepted Accounting Principles (GAAP). This deficiency carries a more than remote likelihood that a misstatement of the company's financial statements, which is more than inconsequential, will not be prevented or detected.

Significant Findings or Issues

In auditing, significant findings or issues refer to substantive matters that are crucial to the procedures performed, evidence obtained, or conclusions reached during an audit. These include significant matters, results of auditing procedures that necessitate substantial modification of planned auditing procedures, audit adjustments, disagreements among engagement team members, difficulties in applying auditing procedures, significant changes in the assessed level of audit risk, and matters that could result in a modification of the auditors' report.

Simple Interest

Interest calculated solely on the initial principal amount of a loan or investment, without compounding on accumulated interest.

Simple Plans

A SIMPLE Plan (Savings Incentive Match Plan for Employees) is a type of employer-sponsored retirement plan available to small businesses with fewer than 100 employees who received at least $5,000 in compensation in the preceding year. This plan allows employees and employers to contribute to individual retirement accounts (IRAs) set up for employees, typically offering tax benefits to both parties.

Simple Trust

A simple trust is a type of trust that is mandated to distribute all its income currently, regardless of whether the distribution actually occurs, and it does not allow provisions for charitable contributions. This type of trust differs from a complex trust and can change its classification based on its activities in a given year.

Simplified Employee Pension (SEP) Plan

A pension plan where only the employer contributes to an individual retirement account (IRA) set up for each eligible employee, providing a simplified method for making retirement contributions.

Single Audit Act

The Single Audit Act is a set of United States federal regulations that require audits for states, local governments, and nonprofit organizations receiving federal funds exceeding a specified threshold. It aims to ensure proper use and management of federal funds.

Single-Premium Deferred Annuity (SPDA)

A financial product similar to an Individual Retirement Account (IRA), into which an investor makes a one-time, lump-sum payment. The funds are invested in either fixed-return or variable-return instruments and grow tax-deferred until distributions are taken.

Sinking Fund

A sinking fund is a separate account where money is regularly accumulated and specifically earmarked for the redemption of debt securities or preferred stock, helping ensure funds are available for these future liabilities.

Small Business Stock

Shares issued by a qualified C Corporation whose gross assets do not exceed $50 million and uses at least 80% of its assets in the active conduct of one or more qualified trades or businesses. Noncorporate investors may exclude up to 50% of the gain realized on the sale of these stocks, provided the stocks were issued after August 10, 1993, and held for more than five years.

Sole Proprietorship

A sole proprietorship is a type of business entity that is owned and operated by a single individual, with no legal distinction between the owner and the business.

Solvency

The state of being able to meet financial obligations as they come due, ensuring the ability to continue operations and meet both short-term and long-term debts.

Solvent

Capable of meeting all financial obligations as they come due, thereby remaining financially stable.

Special Assessment

A charge levied by a local government on property owners to fund specific public projects or improvements from which the property owners will benefit directly.

Special Report

A report issued by auditors related to various types of financial presentations, including financial statements prepared in accordance with a comprehensive basis of accounting other than generally accepted accounting principles, specified elements or items of financial statements, compliance with contractual or regulatory requirements, or financial information presented in a specific prescribed form that necessitates a particular type of auditor's report.

Specialist

A member of a stock exchange designated as the market maker for one or more securities, responsible for maintaining a fair and orderly market by executing limit orders, managing temporary imbalances in supply and demand, and preventing wide swings in stock prices.

Specialized Mutual Fund

A mutual fund that confines its investments to a specific sector of the marketplace, focusing on a particular industry, geographic region, or type of security.

Specific Identification Method

An inventory valuation method that tracks and prices each item in the inventory individually, based on the specific cost of each particular item.

Speculation

The process of making high-risk financial transactions with the potential for significant gains, but also with a higher-than-average possibility of incurring losses.

Spinoff

A corporate action where a company transfers all or a portion of its subsidiary's stock or other assets to the stockholders of the parent company on a pro rata basis.

Split Offering

A new municipal bond issue that is divided into two parts: one part consisting of serial bonds and the other of term maturity bonds.

Spot Market

A market where commodities or financial instruments are traded for immediate delivery and payment based on the settlement conventions of the particular market.

Spread

In finance, spread refers to the difference between two prices, rates, or yields. It can describe the gap between the bid and ask prices of a security, the price difference between buying and selling positions in futures or options for the same commodity but different months, the difference between the price an underwriter buys an issue and the price at which it is sold to the public, or the additional yield an issuer pays over a benchmark rate to borrow money.

Spreadsheet

A computer program that organizes numerical and other data into rows and columns, primarily for the purpose of calculation, analysis, and data management.

Standard

A widely recognized and accepted basis for a system of measurements or criteria.

Standard Cost

Realistic estimated costs for direct materials, direct labor, and factory overhead that are predetermined before the actual production or operation occurs.

Standard Deduction

A fixed amount that individual taxpayers can subtract from their adjusted gross income to reduce taxable income, if they do not itemize their deductions. The standard deduction varies depending on the taxpayer's filing status and is adjusted annually.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of values. It indicates how much individual values in a data set tend to deviate from the mean or average of the distribution.

Start-Up Costs

Expenses incurred during the process of creating a new business. These costs may include expenditures related to legal fees, property leases, marketing, initial inventory acquisition, and other pre-operational activities.

Stated Value

The per share amount determined by the board of directors to be recorded in the capital stock account when issuing no-par value stock.

Statement

A detailed summary provided to customers, outlining the transactions that occurred over a specific period, typically a month.

Statement of Cash Flows

A financial statement that categorizes and summarizes the cash inflows (receipts) and outflows (payments) during a specific period, divided into operating, investing, and financing activities. It provides insight into a company's liquidity and cash position, reconciling the beginning and ending cash and cash equivalents, as required by Generally Accepted Accounting Principles (GAAP).

Statement of Cost of Goods Manufactured

A financial report that summarizes the total manufacturing costs incurred during an accounting period, including the costs of materials, labor, and overhead, to produce goods.

Statement of Financial Accounting Standards (SFAS)

Official documents issued by the Financial Accounting Standards Board (FASB) that detail accounting principles and practices to be used in the preparation of financial statements.

Statement of Financial Condition

A financial statement that presents the assets, liabilities, and equity of an entity as of a specific date, usually accompanied by disclosures that outline the accounting principles used in its preparation. This statement is also known as a balance sheet.

Statement of Owner’s Equity

A financial statement that outlines the changes in the owner's equity, or capital account, over a specific financial period, detailing sources of increase or decrease such as profits, losses, investments, and withdrawals.

Statements on Auditing Standards (SAS)

Statements issued by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) that provide guidelines for auditors to follow in the conduct of an audit.

Statements on Standards for Accounting and Review Services (SSARS)

Statements issued by the American Institute of Certified Public Accountants (AICPA) that provide guidelines for accountants in the preparation of unaudited financial statements and related disclosures, specifically focusing on compilation and review services.

Statute of Limitations

A law that sets the maximum period during which legal proceedings may be initiated or rights enforced. In the context of tax returns, the statute of limitations typically extends for three years from the date the return is due or actually filed.

Stepped Up Basis

The adjusted value of an inherited asset, where the basis is increased to the fair market value of the property at the time of the decedent's death. This adjustment often results in a higher basis than the decedent's original purchase price, potentially reducing capital gains taxes if the asset is later sold.

Stock Compensation Plan

A fringe benefit that allows employees to purchase the employer's stock at a specified price within a specified period, often used as an incentive or reward.

Stock Exchange

An organized marketplace where stocks, common stock equivalents, bonds, and other securities are bought and sold by members who may act as agents or principals in these transactions.

Stock Market

A public and organized marketplace where securities are traded. The stock market includes various exchanges where stocks, bonds, and other financial instruments are bought and sold.

Stock Options

Financial derivatives that provide the holder the right, but not the obligation, to buy or sell a specified number of shares of a company's stock at a predetermined price within a specified time period.

Stock Rights

Stock rights are privileges granted to existing shareholders of a corporation, allowing them to purchase additional shares at a price typically below the current market value before the shares are offered to the public. These rights can be exercised, sold, or allowed to expire.

Stock Split

A stock split is a corporate action that increases the number of a company's shares outstanding by issuing more shares to current shareholders proportionally, without any additional capital investment from them. This usually results in a reduction in the par value of each share.

Stockholder

A person or entity that owns shares in a company, thereby holding partial ownership and entitled to a portion of the profits in the form of dividends and capital gains.

Stockholders’ Equity

Stockholders' equity represents the ownership interest of shareholders in a corporation, calculated as the difference between total assets and total liabilities.

Straight-Line Depreciation

An accounting method that allocates the cost of an asset evenly across its useful life, reflecting equal wear and tear during each accounting period.

Straight-Line Percentage

A percentage used to determine the amount of depreciation to be recorded each accounting period for the straight-line method of depreciation.

Strike Price

The predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Subsequent Event

A material event that occurs after the end of the accounting period but before the publication of an entity's financial statements, which may affect the financial statements and is disclosed in the notes to the financial statements.

Subsidiary

A company that is either wholly or partially owned by another corporation, known as the parent company. The parent company holds more than 50% of the voting shares, giving it control over the subsidiary. Subsidiaries can be located in the same or different countries as the parent company, and their financial results are included in the parent company's financial statements.

Sum-of-the-Years-Digits Method

An accelerated depreciation method where the depreciable value of an asset is multiplied by a decreasing fraction each year of the asset's useful life, resulting in higher depreciation charges in the earlier years and decreasing amounts later.

Surplus

An excess amount of an asset or resource compared to what is needed, often used in financial contexts to describe the amount by which revenue exceeds expenses.

Surviving Spouse

A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.

Swap

A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.

T Account

A T Account is a visual representation of an account in accounting, shaped like the letter 'T', used to record and track the increases and decreases in a particular financial account.

Takeover

A takeover refers to the transfer of control of a company from one group of shareholders to another, characterized by a change in the controlling interest of the corporation. This can occur through a friendly acquisition or a hostile bid, where the latter often involves a public tender offer with the intention of replacing the current management.

Tangible Asset

Assets having a physical existence that can be seen and touched, such as cash, land, buildings, machinery, and other physical properties.

Target Costing

A pricing method that identifies the competitive market price of a product, determines the desired profit, and calculates the target cost by subtracting the desired profit from the market price.

Tax

A charge levied by a governmental unit on income, consumption, wealth, or other basis to fund public services and governmental activities.

Tax Basis

The original cost of an asset, adjusted for factors such as depreciation, that is used to calculate capital gains or losses for tax purposes.

Tax Court

The U.S. Tax Court is a federal court that specializes in handling disputes between taxpayers and the Internal Revenue Service (IRS) related to the assessment of income, gift, estate, certain excise taxes, and other tax-related issues. It does not have jurisdiction over matters such as employment taxes or certain other types of taxes.

Tax Credit for the Elderly and Disabled

A tax benefit available to taxpayers aged 65 or older, or those under 65 who are retired due to permanent and total disability, designed to reduce their tax liability. The credit amount is determined based on the taxpayer's filing status and is adjusted by subtracting any nontaxable income. The credit phases out for individuals whose adjusted gross income exceeds specified levels.

Tax Lien

An encumbrance placed on property as security for unpaid taxes, giving the taxing authority a legal claim against the property until the debt is paid.

Tax Shelter

A tax shelter is a legal arrangement where certain investments or financial decisions are made to reduce, defer, or eliminate tax liabilities.

Tax Year

The annual accounting period for which a taxpayer calculates their taxable income. This can be a calendar year, a fiscal year, or a fractional part of a year if the return is made for a portion of the year.

Taxable Earnings

The portion of an individual's or entity's income that is subject to taxation, according to the laws and regulations of the tax jurisdiction.

Taxable Income

Taxable income is the amount of a taxpayer's income that is subject to taxation, calculated by subtracting allowable exemptions and deductions from the adjusted gross income during the tax year.

Taxable Municipal Bond

A debt obligation issued by state or local government entities that is subject to federal income tax, unlike traditional municipal bonds. These bonds arose from the Tax Reform Act of 1986.

Taxpayer Identification Number (TIN)

A unique identification number that is required to be used by an individual or entity in any tax-related documents filed with the IRS. For individuals, this is typically their Social Security Number (SSN), while other entities such as businesses may use an Employer Identification Number (EIN) or other federally assigned ID.

Tenancy-in-Common

A form of co-ownership where each owner holds an undivided interest in property, and upon death, their share passes to their heirs or beneficiaries rather than to the other co-owners.

Term

The period of time during which the conditions of a contract are to be executed or are in effect.

Term Loan

A loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.

Test

In finance, a test refers to a criterion used to measure compliance with financial ratio requirements of indentures and other loan agreements, or an event of a price movement that approaches a support level or a resistance level established earlier by the market. A test is passed if prices do not go below the support or resistance level, and it is failed if prices go on to new lows or highs.

Time Value

The value of money with respect to the time it is available, reflecting the concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Time Value of Money

The principle that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.

Timing of Tests of Control

The period during which an auditor evaluates the operational effectiveness of controls as specified in management's report to determine if they are sufficient for achieving the objectives of the control criteria up to a certain date.

Title

The legal evidence, such as a deed, that establishes one's right to ownership or control of a particular property or asset.

Ton

In bond trading jargon, 'ton' refers to $100 million.

Total Capitalization

The total value of a company's capital structure, including all forms of equity and long-term debt.

Total Cost

The aggregate of all costs, including fixed costs, semi-variable costs, and variable costs, incurred in the production of goods or services.

Total Direct Labor Cost Variance

The difference between the actual labor costs incurred and the standard labor costs for the actual production achieved.

Total Direct Materials Cost Variance

The difference between the actual materials costs incurred and the standard costs of those items, used to assess efficiency in material usage during production.

Total Gain

The excess of the proceeds realized on the sale of assets, including both inventory and noninventory goods, over their original purchase costs.

Total Inventory Method

A lower-of-cost-or-market method of valuing inventory, which requires that inventory be reported at the lower of its historical cost or current market value.

Total Quality Management

A comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback.

Trade

The activity of buying or selling goods and services among companies, states, or countries, often referred to as commerce.

Trade Date

The date on which a security transaction is agreed upon, to be settled at a later date. It is the date when the obligation to buy or sell a financial instrument is legally established.

Trademark

A distinctive name, symbol, motto, or emblem that legally identifies a product, service, or company, distinguishing it from others in the marketplace.

Trader

An individual or entity that buys and sells goods, services, or financial instruments with the intention of making a profit.

Transaction

The act of conducting a business agreement or exchange that is recorded as an entry in accounting books.

Transfer Agent

A transfer agent is an entity, typically a commercial bank, appointed by a corporation to maintain records of investors and account balances, handle issues of lost, stolen, or destroyed certificates, and manage the issuance and cancellation of company stock and bond certificates.

Transfer Price

The price charged by individual entities within a multi-entity corporation on transactions among themselves, often used to allocate revenues and expenses among different divisions of the corporation.

Transfer Tax

A tax imposed by the government on the transfer of ownership of property, including gifts and estates, as transactions occur.