Glossary of Terms
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- Last-in, first-out (LIFO) method:
- An inventory cost method that assumes that the costs of the last items purchased should be assigned to the first item sold.
- Ledger account form:
- The form of account that has four columns, one for debit entries, one for credit entries, and two columns (debit and credit) for showing the balance of the account.
- Liabilities:
- Probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.
- Liquidity:
- Having enough funds on hand to pay debts when they are due and to take care of unexpected needs for cash..
- Long-term liabilities:
- Debts of a business that fall due more than one year ahead or beyond the normal operating cycle; debts to be paid out of non-current assets.