Accountant's Glossary

Accountant's Glossary

Here at PSVS we are in the trenches every day helping you navigate your way through the various complexities of your accounting-related activities. It is easy to forget that not everyone knows all the accounting-specific terminology we use daily.

We have created this fairly comprehensive glossary to supplement your knowledge and understanding and hopefully answer some of your questions.

Of course, if you have any additional questions send us an email or give us a call: (650) 578-1200.

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T Account

An account shaped like a "T" that is used for analyzing transactions.

Tangible Property

Property that can be seen or touched, such as buildings, machinery, vehicles, furniture, and equipment.

Tax Home

The entire city or general area of an individual's regular place of business, employment, or post of duty, regardless of where they maintain their family home.

Tax Liability

The amount of total tax due to the IRS after claiming credits and before reporting payments such as withholding and estimated payments.

Tax Year

The annual period used for keeping tax records and reporting income and expenses. The most common tax year is a calendar year, which ends December 31.

Tax-Exempt Interest

Interest income that is not subject to federal income tax. Tax-exempt interest may or may not be exempt from state income taxes

Taxable Income

Gross income minus any adjustments to income, any allowable exemptions, and either itemized deductions or the standard deduction.


An individual subject to any internal revenue tax. All citizens of the U.S. and all individuals resident in the U.S. are subject to internal revenue tax.

Temporary Assignment

A work assignment in a single location away from a taxpayer's tax home that the taxpayer realistically expects will last (and does last) for one year or less.

Temporary Capital Accounts

Accounts used to record information during the fiscal period that will be transferred to a permanent capital account at the end of the period.

Tenancy by the Entirety

A form of property ownership in which a husband and wife own property jointly. If one owner dies, the survivor is automatically entitled to the decedent's share of the property.

Tenancy in Common

A form of property ownership in which two or more individuals own property separately. If one owner dies, the survivors are not automatically entitled to the decedent's share of the property.

Tentative Minimum Tax

The amount of tax calculated under the alternative minimum tax rules.


The length of time the borrower has to repay a promissory note.

Terminally Ill Individual

Any individual who has been certified by a physician to have an illness that can be reasonably expected to result in death in 24 months or less.

Three-Year Rule

A method for calculating the taxable portion of benefits from a qualified plan for retirees whose annuity starting date was before July 2, 1986.

Tickler File

A file that contains a folder for each day of the month; invoices are placed in the folders according to their due dates.

Tie-Breaker Rule

The method the IRS applies to determine who can claim the tax benefits when two or more tax returns are filed using the same individual as a qualifying child.

Time Card

A record of the time an employee arrives at work, the time the employee leaves, and the total number of hours worked each day.

Time-Savings Account

An interest-bearing savings account that restricts access to its funds for a defined time limit. Funds cannot be withdrawn before the limit without incurring a penalty.


A transfer of property for other property or services.

Trade or Business

An activity carried on for a livelihood or in good faith to make a profit.

Traditional IRA

Any IRA that is not a Roth IRA, a Savings Incentive Match Plan for Employees (SIMPLE) IRA, or a Simplified Employee Pension IRA (SEP-IRA).


Someone who does not have a regular place of business or post of duty and does not have a place where they regularly live.

Transposition Error

Occurs when two digits within an amount are accidentally reversed, or transposed.

Travel Expenses

The ordinary and necessary expenses a person incurs while traveling away from home to meet the demands of their job.

Trial Balance

A proof of the equality of total debits and credits, the fifth step in the accounting cycle.


The person who is responsible for managing the assets of a trust for the benefit of the beneficiaries and who is usually independent of the person who created the trust.

Trustee-to-Trustee Transfer

A transfer of funds in a traditional IRA from one trustee directly to another, either at the taxpayer's request or at the trustee's request. This is not a rollover.

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