Trade payables represent the amounts a business owes to its suppliers for goods and services received but not yet paid for. They are recorded as current liabilities on the balance sheet.
Trade promotion refers to marketing efforts directed at retailers, distributors, or wholesalers to boost product sales and increase distribution. These promotions often involve special pricing, display allowances, or additional marketing support.
A trade rate is a special price offered to retailers by wholesalers, manufacturers, or distributors, or by a seller to individuals or organizations in a related industry.
Trade receivables, also known as accounts receivable or trade debtors, represent amounts owed to a business by its customers for invoiced amounts. These are classified as current assets on the balance sheet but are separate from prepayments and other non-trade debtors. A provision for bad debts is often shown against the trade receivables balance as per the prudence concept. This provision is based on the company's historical data of bad debts and its current expectations.
The Trade Receivables Collection Period refers to the time given to customers to pay their accounts, which is typically 30 days. However, late payments can occur and may affect cash flow significantly.
A trade reference is a critical component for assessing the creditworthiness of a trader, typically provided by another member within the same trade, often required by suppliers before extending credit terms.
A trade secret is any formula, pattern, machine, or process of manufacturing used in a business that may provide a competitive advantage; it includes plans, processes, tools, mechanisms, or compounds known only to its owner and necessary employees.
A trade show is an event held to exhibit goods and services for the benefit of individuals or companies involved in a particular trade. It typically takes place in an exhibition hall where exhibitors rent space to display their offerings.
A trade union, also known as a labor union, is an organization formed by workers to protect their rights, improve working conditions, secure better wages, and advocate for their interests through collective bargaining and various forms of negotiation with employers.
A Trade War is a conflict involving two or more countries aimed at improving their own import/export positions by imposing tariffs or other trade barriers against each other.
A trade-off involves giving up one benefit or advantage to gain another that seems more favorable. This concept is prevalent in various decision-making processes where resources such as time, money, and effort are limited. Trade-offs are a fundamental aspect of economics, business strategy, and personal decision-making. For example, investing in education might involve a financial loss in the short term but yield higher earning potential in the future.
A trademark is a recognizable sign, design, or expression that identifies products or services of a particular source from those of others. Used by companies to protect brand identity and maintain market presence.
A Trademark is a distinctive symbol or device used to identify and differentiate the products of a particular trader from those of others. Trademarks offer legal protection and can be registered for exclusive use.
A trader is generally anyone who buys and sells goods or services for profit, also known as a dealer or merchant. In the context of investment, a trader refers to an individual who actively buys and sells securities for their own account.
A trading account, crucial in financial accounting, involves comparing the cost of sales with the revenue generated to determine the gross profit within a profit and loss account.
Trading authorization is a document giving a brokerage firm employee acting as an agent (broker) the power of attorney to buy and sell transactions for a customer.
Trading blocs are agreements between multiple countries that aim to make trade easier and more beneficial for member nations while typically imposing trade barriers on non-members.
The trading desk at the New York Federal Reserve Bank is the operational arm of the Federal Open Market Committee (FOMC), responsible for executing all transactions undertaken by the Federal Reserve System in the money market and government securities market. It also serves as the Treasury Department's monitor and handles foreign exchange market transactions.
A trading halt is a temporary suspension of trading for a particular security, typically imposed by a regulatory authority to ensure fair trading and to allow the dissemination of important information.
A trading limit, also known as a fluctuation limit, is the maximum amount that the price of a commodity future, option, or listed security may fluctuate during a trading session.
A trading post is a physical location on a stock exchange floor where specific securities are bought and sold. It serves as a focal point for the activities of market makers, brokers, and traders.
Trading Profit represents the profit of an organization before deductions for interest, directors' fees, auditors' remuneration, and other similar expenses. It is crucial for assessing the core operating efficiency of a business.
A trading range is defined both in commodities and securities markets, encompassing the price limits within which a commodity or security is allowed to move during a trading day.
In financial markets, a trading unit refers to the standard number of shares, bonds, or other securities that is generally accepted for ordinary trading purposes on exchanges.
Traditional costing systems are methods used to allocate indirect costs (overheads) to products, but they may not offer accurate product cost information due to their arbitrary allocation methods. These systems have strengths such as simplicity and cost-efficiency, but weaknesses include lack of precision in contemporary multiproduct environments.
An economy dominated by methods and techniques that have strong social support even though they may be old-fashioned or out of date.
In communications, 'traffic' refers to the flow of data over telephone lines or other communications networks, whereas in retailing, it denotes the activity of potential customers, such as pedestrian traffic.
A tramp ship or boat is a maritime vessel that does not follow a regular schedule or itinerary; instead, it travels wherever freight shipments take it.
A tranche is a portion or slice of a larger sum of money or a security with differing risk-return profiles used in financial operations such as loans, funding, and securitizations.
A transaction is an external or internal event that causes a change affecting the operations or finances of an organization.
Transaction costs are the expenses incurred during the process of buying or selling investments. They are critical to consider as they can significantly impact the net gains from transactions.
Transaction Costs refer to the various expenses incurred when making a transaction, beyond the actual price of the goods or services exchanged. These can include research, bargaining, and enforcement costs, among others.
The date on which a transaction in the money market took place.
Transaction exposure refers to the risk that a firm's exposure to exchange-rate fluctuations will impact the value of anticipated cash flows from a transaction when the contractual obligation is settled.
A computer file used to record both external and internal transactions, crucial for maintaining accurate and up-to-date financial records. Transaction files are frequently compared to standing data files in accounting systems.
Transactions demand for money pertains to the necessity of keeping liquid assets, primarily cash, on hand to manage daily transactions. This is a fundamental motive for individuals and businesses to hold money.
A transfer agent is an individual or firm responsible for maintaining records of a corporation’s shareholders, including names, addresses, and the number of shares owned. They handle the issuance and cancellation of stock certificates when shares are bought or sold.
Transfer credit risk refers to the risk faced by a creditor, often in long-term contracts, due to a foreign debtor's inability to obtain foreign currency from the central bank despite being able and willing to pay. It is an aspect of international credit exposure.
Transfer Development Rights (TDR) is a zoning ordinance mechanism designed to protect land designated for low-density development or conservation by allowing property owners to trade development rights.
Under VAT regulations, the disposal of a business by a registered trader to another VAT-registered trader, on which VAT is not charged. However, new measures were introduced in the 2004 Budget to counter VAT-avoidance schemes utilizing the rules on TOGC. HM Revenue and Customs (HMRC) is responsible for applying these rules.
A transfer payment is a payment made by the government to individuals, which is not in exchange for goods or services. It includes payments such as Social Security benefits, unemployment insurance, and welfare.
Transfer price refers to the price charged by individual entities of a multi-entity corporation on transactions among themselves. It is also termed transfer cost and is predominantly used where each entity is managed as a profit center and must deal with other internal parts of the corporation on an arm's length basis.
Transfer prices refer to the costs at which goods and services are exchanged between divisions or subsidiaries within a conglomerate. They significantly influence the profitability of each division and can serve multiple strategic purposes including motivating managers, evaluating performance, maintaining autonomy, and moving profits.
Transfer pricing involves setting prices for transactions between affiliated entities under common ownership, often used to allocate revenue and expenses among those entities to benefit from tax advantages.
Transfer tax is a tax paid upon the passing of title to property or to a valuable interest. This tax can apply to real estate transactions and certain financial transactions.
A Transferable Loan Facility (TLF) allows a lender to transfer the rights of the loan to a third party without the need to inform the borrower, making it a flexible financial instrument.
A bank loan facility that can be traded between lenders, aimed at reducing the credit risk for the originating bank.
A motivational management method whereby employees are encouraged to achieve greater performance through inspirational leadership, which develops employee self-confidence and higher achievement goals.
A transient condition refers to a temporary, fleeting, or passing phenomenon. It denotes a state or event of brief duration.
A transient worker is an individual who frequently moves from one job to another, lacks a fixed residence, and does not have a specific business locality. Each location where they work becomes their primary business and tax home, and they are not able to deduct expenses for meals and lodging.
Translation involves expressing text or speech from one language into another, making it comprehensible in a different linguistic context. It also refers to the broader process of transforming text to another form.
Translation exposure, also known as accounting exposure, is a type of financial risk that results from the translation of an entity's assets and liabilities from one currency to another.
Translation risk, also known as currency risk, is the monetary value risk that occurs in international trade when two or more currencies are used in a transaction. The longer the period before the transaction ends, the greater the translation risk.
A transmittal letter is a letter sent with a document, security, or shipment describing the contents and the purpose of the transaction.
Transnational refers to activities, processes, or phenomena that extend beyond national boundaries. This term is often used in the context of business, law, communications, and socio-political movements, among others.
Transparency in financial reporting refers to the ease of understanding financial information through the full, clear, and timely disclosure of relevant details. It enables stakeholders to make informed decisions and detect fraudulent activities or manipulations.
Transportation insurance is a type of insurance coverage that protects goods and merchandise while they are in transit from one location to another, whether that takes place via road, rail, sea, or air.
Travel and Entertainment (T&E) expenses are ordinary and necessary expenses incurred while traveling away from home for business purposes, subject to specific tax regulations.
A treasurer is a key financial executive responsible for managing the financial assets and liabilities of an organization, ensuring sound financial practices, and maintaining strategic relationships with financial markets.
Treasuries are negotiable debt obligations of the U.S. government, secured by its full faith and credit, and issued at various schedules and maturities. The income from U.S. Treasury securities is exempt from state and local taxes but subject to federal taxes.
A U.S. government promissory note issued by the U.S. Treasury with a maturity period of up to one year. T-Bills are sold at a discount to face value, which is paid out at maturity, providing interest income to the investor.
A Treasury Bond (T-Bond) is a long-term debt instrument issued by the U.S. government, as well as a term for bonds bought back by corporations.
A Treasury Decision (T.D.) is a formal pronouncement issued by the United States Department of Treasury that implements, interprets, or prescribes law or policy related to taxation and the Internal Revenue Code.
The Treasury Department is an executive department of the U.S. government responsible for managing national finances, including collecting taxes, paying bills, and managing currency, government accounts, and public debt. It aims to promote economic growth and stability.
TreasuryDirect is an electronic platform that allows individual investors to purchase U.S. Treasury securities directly from the government, thus bypassing intermediaries like banks and brokers.
Treasury Inflation-Protected Securities (TIPS) are U.S. Treasury securities designed to help investors protect against inflation. The principal of TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index (CPI).
Treasury Inflation-Protected Securities (TIPS) are a type of inflation-indexed treasury bonds that adjust their principal value based on the Consumer Price Index (CPI). TIPS offer protection against inflation while providing a lower interest rate.
TIGERs (Treasury Investors Growth Receipts) are U.S. government-backed bonds stripped of their coupons and sold separately at a deep discount.
Intermediate-term (one to 10 years) obligation of the U.S. government that bears interest paid by coupon. Treasury notes carry the highest domestic credit standing and have the lowest taxable yield available at equivalent maturity.
Treasury stock refers to shares of a company's own stock that have been reacquired by the company itself, subsequently reducing the number of shares available in the open market.
A tree diagram is a graphic representation of a sequence of events where subsequent decisions depend on the results of previous decisions. Tree diagrams are used to map the possible alternatives and develop strategies for decision making.
A trend is a general direction of movement that can be observed in various fields such as technology, economics, fashion, and finance. In the context of securities, a trend refers to the long-term price or trading volume movements, either up, down, or sideways, that characterize a particular market, commodity, or security, and also applies to interest rates and yields.
Trend analysis involves evaluating the performance of a company or industry over a period using accounting ratios to identify patterns and forecast future performance.
A Trend Line is a line drawn over pivot highs or under pivot lows to show the prevailing direction of price. Trend lines are a visual representation of support and resistance in any timeframe and are used by technical analysts to chart the past direction of a security or commodity future. By identifying these trends, analysts can make informed predictions about future price movements.
Trespass refers to the unlawful entry or possession of another person's property without permission. It is a legal concept in property law covering physical intrusion on land, buildings, or personal space.
Trial and error is an empirical method used to test a hypothesis or procedure by repeating an experiment until the chance of error or desired outcome is reliably achieved. It is commonly used in situations where no established theory is available.
A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns. This process helps ensure the accuracy of the company’s financial records and is a critical step in the accounting cycle.
In the context of commerce, a trial buyer is an individual or entity who participates in a trial offer, allowing them to test a product or service before fully committing to a purchase. This strategy is often used to attract potential customers by lowering their initial investment risk.
Trial courts are the first level of court where a case is initially heard and are responsible for examining the evidence and assessing the facts of a dispute. They are courts of original jurisdiction.
A soft-offer technique that allows a first-time buyer to examine, use, or test a product for a short period of time before deciding to purchase or return it; also called free trial offer, free examination offer.
A small quantity of a product offered at no charge (or a low promotional price) to induce the customer to try the product, often used in product promotion.
The Trickle Down Theory is an economic concept suggesting that policies benefiting the wealthy and businesses can ultimately benefit lower-income individuals through increased economic activity.
A mechanism instituted to protect domestic markets from unfair competition by imposing trade restrictions when the price of an imported commodity drops below a specified threshold.
Trip Cargo Insurance protects goods in transit for a single trip, covering potential risks associated with transportation.
Triple Bottom Line (TBL) accounting is an accounting framework that incorporates three dimensions of performance: social, environmental, and financial. TBL aims to evaluate a company's commitment to corporate social responsibility and sustainable growth.
Triple Bottom-Line Accounting (TBL) is a method of measuring a company's social and environmental impact in addition to its economic value. This approach evaluates a company's performance through a three-pronged focus: economic profit and loss, corporate social responsibility, and environmental impact.
The American Automobile Association (AAA), commonly referred to as Triple-A, is a federation of motor clubs throughout North America. The organization provides a variety of services to its members, including maps, tourist information, and emergency roadside assistance.
A Triple-A Tenant refers to a tenant with an excellent credit record, typically used in commercial real estate to indicate high financial stability and reliability.
A Triple-Net Lease (NNN) is a commercial real estate lease agreement in which the tenant agrees to pay all operating expenses related to the property, in addition to the rent paid to the landlord.
A type of malware disguised as a benign, useful, and desirable program, such as a screensaver or game. Unlike viruses and worms, Trojans usually gain access through software intentionally installed by the user.
The Troubled Asset Relief Program (TARP) was a U.S. government initiative aimed at stabilizing the financial system and restoring bank lending during the subprime mortgage crisis by purchasing up to $700 billion in troubled assets from financial institutions.
A U.S. government program created to stabilize the financial system during the 2008 financial crisis by purchasing distressed assets and injecting capital into banks.
The Troubled Assets Relief Program (TARP) was a U.S. Treasury program established under the Emergency Economic Stabilization Act (EESA) of 2008 to stabilize the financial system during the financial crisis by purchasing troubled assets and providing capital to financial institutions.
A troubleshooter is a person with specialized skills in identifying and solving issues within an organization. They are often employed to resolve technical or operational problems efficiently.
In economic terms, a trough signifies the lowest point in a business cycle, marking the end of a declining phase and the start of an expansion or recovery.
Troy weight is a system of measurement used mainly for determining the weight of precious metals and gemstones.
A truckload (TL) refers to a quantity of cargo that fills a truck to its maximum capacity, typically utilized in logistics and transportation for the efficient and cost-effective movement of goods.
An essential audit concept, primarily used in the UK, requiring auditors to ensure that the published accounts of companies present a 'true and fair view' of the organization's financial position, even if it means departing from legal requirements.
A True Lease is a leasing arrangement in which the lessor retains the risks and rewards of ownership, distinguishing it from other lease types like Financial Lease and Synthetic Lease.
The Trueblood Report, prepared by a committee chaired by Robert M. Trueblood and published by the American Institute of Certified Public Accountants (AICPA) in 1971, aims to define the fundamental objectives of financial statements. The report was instrumental in shaping the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Concepts No. 1.
