Any time you see a Dropdown like that, that is your indication this is a List.
So, go to Lists menu > if you don't see it here, notice there is a small arrow indicating Submenus. Go to the Customer & Vendor Profile list submenu.
Here you will see Terms List. You work from here, and you are controlling what is available in the dropdown, right here in that List.
This is a Basic QB function and applies to all Dropdowns and Lists.