T

TO FIRE

The situation of an employee who is discharged for poor performance or an infraction of company rules. As compared with LAID OFF.

TAKE INVENTORY

The process of counting the goods, products, assets or other property on hand. Frequently used in merchandising where all the products for sale are counted to compare with accounting records of what should be on hand.

TAKEOVER

The acquisition of one company by another, sometimes a hostile situation, by a large creditor at the objection of the current owner.

TANGIBLE

Real. A thing that can be seen, touched and evaluated. As opposed to INTANGIBLE. See TANGIBLE ASSET.

TANGIBLE ASSET

Something owned, an asset, that has physical form such as real property, personal property or money equivalents. Examples include land, cash, real estate, machinery, inventory, accounts receivable and securities. Other than physical property, when an asset has a market value that can be readily verified, it can be considered tangible; otherwise the asset is classified as INTANGIBLE. See ASSET; INTANGIBLE ASSET.

TANGIBLE NET WORTH

See NET WORTH.

TARGET MARKET

That segment of the market that is identified as the primary customer. The specific individuals or firms, distinguished by socio-economic, demographic, and/or interest characteristics, that are the most likely potential customers for the goods or services of a business.

TARGET MARKETING

The process of determining the specific niche from a large customer potential. See TARGET MARKET.

TARIFF

A tax on IMPORTED GOODS, most often computed as a percent of the price charged for the good by the foreign supplier; an import tax rate schedule. Same as CUSTOMS DUTY, DUTY. In transportation, the amount payable for shipment of goods.

TAX

A payment required to be made to a government body, resulting from legislation.

TAX ADVICE

Guidance by a professional (usually a lawyer or certified public accountant) to a business concerning business decisions to minimize the tax to be paid.

TAX ADVISOR

A person or firm that provides TAX ADVICE.

TAX BASE

The assessed value of the property subject to taxes.

TAX CONSEQUENCES

The tax payments that result from a business decision. Some decisions cause more tax to be paid than others.

TAX CONSIDERATIONS

In business decision-making, evaluation of the effects of taxes that must be paid as a result of a business’s decision. One alternative may require payment of less taxes, and, along with other considerations, sway the choice made.

TAX-EXEMPT NUMBER

See SALES TAX-EXEMPT NUMBER.

TAX-FREE

No payment of tax is required. Usually, things that are normally taxed, but under certain circumstances, tax payment is averted or tax payment is made by another party for the benefiting person. For instance, some amount of products can be imported tax-free (duty-free).

TAX-FREE PERKS

Company benefits to an individual or employee on which the person does not pay tax. Care must be exercised to ensure that only legal means of tax-free income is earned by the employee.

TAX GUIDE FOR SMALL BUSINESSES

See PUBLICATION #334.

TAX IDENTIFICATION NUMBER

The number assigned by the federal or a state Department of Revenue to a corporation or a partnership used for recordkeeping purposes. Federal and state governments issue these numbers for income taxes reported by corporations and partnerships. The owner of a sole proprietorship utilizes his or her social security number for this purpose. In addition, states issue state sales tax identification numbers to all firms selling directly to the consumer, for the collection of state sales tax.

TAX I.D. NUMBER

The number assigned by the federal or a state Department of Revenue to a corporation or a partnership used for recordkeeping purposes. Federal and state governments issue these numbers for income taxes reported by corporations and partnerships. The owner of a sole proprietorship utilizes his or her social security number for this purpose. In addition, states issue state sales tax identification numbers to all firms selling directly to the consumer, for the collection of state sales tax.

TAX NUMBER

The number assigned by the federal or a state Department of Revenue to a corporation or a partnership used for recordkeeping purposes. Federal and state governments issue these numbers for income taxes reported by corporations and partnerships. The owner of a sole proprietorship utilizes his or her social security number for this purpose. In addition, states issue state sales tax identification numbers to all firms selling directly to the consumer, for the collection of state sales tax.

TAX LIABILITY

The amount of tax owed.

TAX LOSS CARRY-BACK

An income tax loss in one year may be used to refund previously paid taxes in any/all of the most recent three years past or may be used to reduce taxes due in any/all of the next 15 years.

TAX LOSS CARRY-FORWARD

An income tax loss in one year may be used to refund previously paid taxes in any/all of the most recent three years past or may be used to reduce taxes due in any/all of the next 15 years.

TAX PENALTY

An additional amount of tax required if taxes have not been paid in accordance with the law, such as from late payment or false statements on a tax return.

TAX PLAN

An assessment or estimate of taxes due.

TAX PUBLICATIONS

Documents describing taxes, items included, items excluded, tax calculations and other tax information. Often printed by a government agency but could be privately published. See PUBLICATION #334; PUBLICATION #583.

TAX RATE

The percentage used to calculate the amount of tax due.

TAX REFERENCES

Locations, documents, information sources or other material concerning taxes.

TAX REFORM ACT

The enactment of a law by a government body, most commonly the U.S. federal government, that affects the amount of taxes to be paid by a business.

TAX RETURN

The document used for preparing income taxes due and submitting the calculations to a government agency.

TAX ROLL

The public record list of persons and businesses required to pay a tax.

TAX SHELTER

A phrase used to describe some business conditions that reduce the amount of tax due. The effect may be avoidance of a tax payment, reduction of a tax rate or delay in a tax payment to a later period.

TELEMARKETING

Advertising, canvassing or selling over the telephone, with one person speaking to another.

TEMPORARY WORKER

A worker that is not a regular employee of the firm and is hired for a short period.

TENANT

A LESSEE, when the property rented is real estate. See LEASE.

TENDER

An unconditional offer by one of the parties to a contract to perform his or her part of the bargain.

TERM

A period of time; the duration over which activities will occur. Examples include: the period of time for execution of the conditions of a contract; length of time over which loan payments must be made; the length of time a term life insurance policy is in force; the duration of time a board member will serve; the duration of a lease period. Specifying the nature of an agreement; the provisions of a contract, as in the terms of a contract. See TERMS AND CONDITIONS.

TERM DEBT

A DEBT due to be paid over a period of time, as opposed to be paid entirely at one time in one lump sum.

TERM LOAN

See TERM DEBT.

TERMS AND CONDITIONS

The provisions of a contract specifying the activities and actions that must be accomplished and sometimes the methods used in performance of the contract; a further definition of the scope of a contract; contract limits; contractual agreements.

TERMS OF PAYMENT

Those provisions in a financial exchange that define the means for satisfying the monetary part of the deal; the dates, amounts, forms and persons who will pay this money.

TEST MARKETING

Small sample analytical experimentation of new products or marketing techniques to determine effectiveness before full commitment.

THE FED

See FEDERAL RESERVE SYSTEM.

THIRD-PARTY CHECK

A double-endorsed CHECK that involves three persons or businesses and a BANK. The primary party to the transaction is the DRAWER (the preparer of the check) against funds on deposit in the bank; the secondary party is the PAYEE who endorses the check by signing on the back and passing the check to a third party who endorses the check prior to cashing it. Recipients of checks with multiple endorsers are reluctant to accept them unless the identity and signature of each endorser can be verified.

THRESHOLD COMPANY

A business that is progressing beyond the entrepreneur stage, striving to achieve long-term growth and prosperity.

TIGHT MONEY MARKET

An economic condition in which loans are difficult to obtain because of limited money supply, yet the demand for borrowing is high and often associated with high interest rates.

TIME DRAFT

See DRAFT.

TIME OF INCORPORATION

The date a state CERTIFICATE OF INCORPORATION is issued; or generally reference to that time.

TIME-PRICE DIFFERENTIAL

The difference between the purchase price of something and the higher total price of the same thing if purchased on an installment basis (including finance charges). Under truth-in-lending laws, a lender must disclose the time-price differential as well as all finance charges on an installment contract.

TIME SHEET

A document that records the hours worked by an employee; most often, hand-written by the employee.

TIMES-INTEREST-EARNED RATIO

A measurement of a business’s ability to pay its debts; a multiple by which recurring income provides for payment of interest income. If a business can keep current on its interest payments, the business can usually refinance principal and maintain the confidence of creditors.

TIME VALUE

See TIME VALUE OF MONEY.

TIME VALUE OF MONEY

A generalized economic principle whereby inflation, interest rate or earning power cause the worth of a dollar (PRESENT VALUE) today to be greater than the worth of a dollar in the future (FUTURE VALUE). See INTERNAL RATE OF RETURN.

TITLE

The document evidencing ownership of property whether real or personal property.

TOOL

An implement, instrument or utensil used to increase a person’s natural ability or capacity to do work. Most often tools are handheld, but the term can also apply to anything used to increase work output, such as a machine tool or a personal computer.

TOOLS OF THE TRADE

The TOOLS, instruments or devices necessary to the accomplishment of a trade, occupation or business. “Tools of the trade” has been adopted as an idiom, meaning those things needed and used to perform a specific task.

TOTAL ASSETS TURNOVER

The efficiency with which assets are employed in the production of sales; divide TOTAL SALES for a period (a year) by TOTAL ASSETS to determine the number of times each dollar of assets becomes a dollar of sales during the period. Comparing similar periods and similar industry statistics determines measures of efficiencies by which the assets are employed in the business.

TOTAL COSTS

In accounting, the sum of all EXPENSES (costs), including both FIXED VARIABLE and COSTS for the period.

TOTAL EXPENSES

Same as TOTAL COSTS.

TOTAL INVESTMENT

The sum of all EQUITY in a business; the amount of invested capital. See INVESTMENT.

TOTAL LIABILITIES

On a BALANCE SHEET, the sum of all the amounts owed; the sum of LIABILITIES.

TOTAL RETURN

An expression of RETURN ON INVESTMENT, taking into account all moneys received (PROFITS), including EARNINGS, DIVIDENDS, INTEREST, capital APPRECIATION and TAX CONSIDERATIONS.

TOTAL SALES

See SALES.

TOTAL VOLUME

Usually refers to the total amount of sales in dollars during a period, but also refers to the quantity of output or quantity of sales made. See SALES.

TOTAL WORKFORCE

On a national or regional level, the aggregate number of persons who are capable of and desire to work. The total workforce consists of the persons who are employed (are working) plus those who are unemployed (not working), but desire to work.

TRACK RECORD

Prior financial and operating statistics; the proof of successful operating performance. In making a credit evaluation, the lender looks at the debtor’s past history of paying other creditors.

TRADE

Buying or selling of goods and services; to exchange for money; commercial companies that do business with each other. To barter; to exchange goods for goods.

TRADE ASSOCIATION

A group of businesses that join together collectively to promote their common interests.

TRADE CREDIT

An open account with suppliers of goods and services. For a business, trade credit is an important external source of working capital by buying now and paying later, although this source can be very expensive when translated into an annual interest rate. Trade credit is shown on a balance sheet as a liability, called ACCOUNTS PAYABLE. Also, a firm’s record of payment with suppliers. Consult DUN & BRADSTREET or MERCANTILE AGENCY ratings of credit worthiness of other businesses.

TRADE-IN

A product owned by the customer that is exchanged as part payment or credit toward the purchase of a new, similar product.

TRADEMARK

A distinctive name, symbol, motto or emblem that identifies a product, service or firm. A certificate issued for such identification by the federal government for a specified period of time, granting the right to prevent competitors from using similar marks in selling or advertising. Thereby, the trademark provides legal protection of the name or symbol used in commerce.

TRADE SHOWS

Exhibits of merchandise or services for the benefit of companies in a particular trade, usually held in exhibition halls, hotels or civic centers.

TRAFFIC

The number of customers (vehicles or potential customers) who visit a business location. Those people who can be considered available as customers of the product or service.

TRAFFIC FLOW

The volume of vehicles or customer activity in a given situation or at a given location; the number of potential customers passing a given area during a period of time in which selling is under way.

TRANSACTION

In accounting, any event or condition that must be entered in the books of account for the company because of its effect on the financial condition of the business, such as to buy, sell or trade. More broadly, a business deal or agreement.

TRANSACTION COST

The cost of exchanging one asset for another asset; the cost of buying or selling. Examples include sales commissions, brokerage fees, legal fees and advertising cost.

TRANSFER

To move from one location to another; to relocate. To move cash assets from one account to another. In accounting, to record information from one document onto another document.

TRANSFER AGENT

The bank or trust company authorized by a corporation to maintain the official record of each registered shareholder’s name, address and number of shares owned.

TRANSFER LIST

The compilation of the trail of stock certificates from one stockholder to succeeding stockholders.

TRANSMITTAL LETTER

A letter that is sent with a document, security or shipment describing the contents and the purpose of the transaction.

TRANSPORTATION

The movement of goods from one location to another, particularly delivery of products to a customer.

TREASURER

An EXECUTIVE officer of a company having the responsibility for keeping the FINANCIAL records of the company in proper order; oversees the accounting functions, prepares the financial statements and other money matters.

TREASURY BILL

A United States government security that is sold to the public for an investment term not to exceed one year.

TREASURY SHARES

See TREASURY STOCK.

TREASURY STOCK

Stock that has been re-acquired by the issuing corporation. Therefore, it is issued but is not outstanding and can be resold. The company owns its own stock. Treasury stock has no voting rights and does not pay dividends.

TRIAL BALANCE

An accounting term applied to preliminary, perhaps incomplete, INCOME STATEMENTS; the process of obtaining a preliminary conclusion on profitability. More specifically, a list of account titles and their debit and credit balances that is used to determine whether posted entries are equal and to establish a basis for summary into financial statements. To make a trial balance is a major step in closing the accounting books for a period.

TRIPLE NET LEASE

The lessee, in addition to rent, assumes payment for all expenses associated with the operation of a property, including fixed expenses (such as taxes and insurance) and operating expenses (such as maintenance and repair). Thus, the lessee pays rent, fixed expenses and operating expenses. Same as NET LEASE.

TRIPLICATE

One of three identical copies. See IN TRIPLICATE.

TROUBLE-SHOOTING

The process of evaluating a malfunctioning product to determine the cause; testing to find the source of the problem so that corrective action can be implemented.

TRUTH IN ADVERTISING

A law that requires media presentations to contain a fair representation of the product or service.

TURNAROUND

For a business in trouble, turnaround describes a business in the process of getting out of trouble. Also, vice versa.

TURNAROUND COMPANY

A company that is now in financial trouble, one that is headed for financial trouble or one that is just emerging out of financial trouble and there is optimism that the company can be operated at a profit. In any of these predicaments, the company can be saved (turned around) and made profitable by changing the methods of operation of the company.

TURNAROUND LOAN

Temporary financing to assist a borrower to acquire another business or to buy its own stock.

TURN-KEY

The point at which a project or product is ready for use, especially a complicated venture. Thus all of the ingredients and necessary functions are performed in advance of the turnkey point so the project can be operated by someone else immediately upon start-up.

TURN-KEY COSTS

Those necessary expenditures that are incurred before a product or project is ready for use.

TURNOVER

A measure of the frequency of occurrence of business activity during a period of time. Usually expressed as a ratio obtained when the total amount is divided by the changes that occurred during the period. Examples include turnover of accounts receivable, inventory, employees and capital. Often when the word turnover is used without other adjectives, the reference is to INVENTORY TURNOVER.

TURNOVER RATIO

A comparative measure of TURNOVER comprising three commonly accepted relationships, i.e., sales-to-receivables, sales-to-inventory and sales-to-fixed-assets.

TWO-PART FORM

A form with carbon paper between the two layers so that two copies are received when one is prepared.

TYPES OF CAPITAL

The various forms of money sources (EQUITY) available to a business, such as personal funds, sale of stock, partners, home equity loan, life insurance loan and investors.

 

All definitions were taken from www.small-business-dictionary.org.