Glossary of Accounting Terms

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Index of Accounting Terms - L

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Law of Supply and Demand Related Terms: Market Equilibrium, Price Elasticity What is the Law of Supply and Demand? An economic principle stating that the price of a good or service is determined by its availability (supply) and consumers' desire for it (demand).
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Letter of Intent (LOI) Related Terms: LOI, Memorandum of Understanding (MOU), Term Sheet What is a Letter of Intent (LOI)? A preliminary document outlining the main terms of a proposed agreement between two or more parties before a final, legally binding agreement is concluded.
Icon representing financial obligations or debts
Liability Related Terms: Debt, Obligation, Payable What is a Liability? A liability is a company's financial obligation to others as a result of past transactions or other past events.
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Liability Insurance Related Terms: Business Insurance, Errors and Omissions Insurance, Professional Liability Insurance What is Liability Insurance? A type of insurance that protects a business from the risks of legal claims resulting from injury or damage to other people or property.
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Limited Liability Company (LLC) Related Terms: LLC What is a Limited Liability Company (LLC)? A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
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Limited Liability Partnership (LLP) Related Terms: LLP What is a Limited Liability Partnership (LLP)? A partnership in which some or all partners have limited liability. It exhibits elements of partnerships and limited companies.
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Limited Partnership (LP) Related Terms: LP, General Partner, Limited Partner What is a Limited Partnership (LP)? A partnership consisting of one or more general partners who manage the business and are liable for its debts, and one or more limited partners who contribute capital and have limited liability.
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Line of Credit (LOC) Related Terms: Credit Line, Borrowing Limit What is a Line of Credit (LOC)? An arrangement between a bank and a customer establishing a maximum loan balance that the bank will permit the borrower to maintain.
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Liquidation Related Terms: Winding Up, Dissolution, Asset Sale What is Liquidation? The process by which a company sells its assets to pay off debts and distribute any remaining assets to shareholders, typically occurring during bankruptcy or closure.
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Liquidity Related Terms: Cash Conversion, Solvency (related) What is Liquidity? The ability of a company to convert its assets into cash quickly to meet its short-term obligations.
Icon representing financial ratios assessing liquidity
Liquidity Ratios Related Terms: Current Ratio, Quick Ratio, Cash Ratio What are Liquidity Ratios? Financial ratios used to evaluate a company's ability to pay off its short-term obligations using its liquid assets.
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Loan Preparation Related Terms: Loan Application Assistance, Financing Documents What is Loan Preparation? Secure funding with our expert loan preparation services.
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Loan-to-Value (LTV) Related Terms: LTV, Mortgage Ratio What is Loan-to-Value (LTV)? The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
Icon representing a decrease in financial value
Loss Related Terms: Deficit, Negative Income, Net Loss What is a Loss? An excess of expenses over revenues in a given period, resulting in a decrease in equity.

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