T

T-Account
T-accounts are a simplified version of ledger accounts. A T-account shows all the
activity for a given account for a specific period of time, or in other words, the T-
account is the summary of several journal entries. By convention, all debit activity is
shown on the left side of T-accounts and all credit activity is shown on the right side
of the T-accounts.
Tangible Asset
A physical asset that you can touch and see.
Taxable Income
The amount on an income tax return after all deductions and adjustments. Taxable
income is the amount against which the tax rate will be applied and the taxes payable
for the period will be determined.
Taxes Payable
An amount calculated by multiplying a company's applicable income tax rate by its
taxable income, which is found on the company’s tax return.
Terminal Value
The present value of a stream of funds that extend into the indefinite future. See also
Gordon Growth Model for a formula that may be used to calculate terminal value.
Time Value of Money
The concept that a unit of currency (such as a dollar) received today is worth more
than the same unit of currency received at some future point. Furthermore, the further
into the future, the less the unit of currency is worth. This is because of three factors;
the opportunity cost of not having the currency to invest, the impact of inflation, and
the risk of not receiving the unit of currency in the future.
Transaction
An event or circumstance that impacts the financial position of a business and needs
to be recorded in the financial accounts.
Treasury Stock
Shares of the company's own stock that the company buys back and holds. Treasury
stock is shown on the balance sheet in the equity section but the account has a debit
(negative) balance because it represents a reduction in equity. This makes sense
because the company has done the exact opposite of what happens when they issue
and sell shares as a way of raising capital. In the case of treasury shares, companies
purchase their own shares and reduce their capital.
Trial Balance
A list of all of the general ledger accounts of the business and their balances at a point
in time. The total amount of the debits must always equal the total amount of the
credits.
U
Unearned Revenue
See also Deferred Revenue. Unearned revenue (or deferred revenue) is a liability that
represents the obligation to provide goods or services to a customer in the future.
Unearned revenue is recorded when a business receives a payment in advance from a
customer, but the business has not yet delivered the good or provided the service.
Once the business fulfills its obligation to provide goods or services, the liability is
reduced and the revenue is recognized. May also be referred to as deferred revenue.
Remember that unearned revenue is NOT revenue.
Useful Life

1
 Period of time that an asset is expected to be productive and able to help the business
generate revenue.
W
Weighted Average
An inventory valuation method which values inventory and related cost of goods sold
at the weighted average cost of the units remaining in inventory at the time of the
associated sale.
Weighted Average Cost of Capital (WACC)
The discount rate which represents the cost to the business of raising funds. This rate
will vary from one business to the next, but is the discount rate that many companies
use in the NPV calculation. If a project or investment cannot return more than the
WACC, the company would lose money on the investment.
Work in Process (WIP) Inventory
Work in process inventory includes all inventory that is currently in production,
somewhere between being raw materials and finished goods. Work in process
inventory includes not only the costs associated with the raw materials being used in
production, but also the costs of any labor and overhead also contributing to the
production.