Basic/General Accounting

Items

• liability

  It is an obligation that a company has to another party.
• LIFO (last in first out)

  It is a method of inventory management where items acquired last are the first ones sold/removed.
• liquidity

  It is the ability of the company to meet its financial obligations and manage its daily operations.
• liquidity indicator

  Something that shows the company’s ability to meet its short- term financial obligations and the ability to manage its daily operations.
• liquidity ratio

  A ratio that shows the company’s ability to settle its short-term liabilities and manage its daily operations.
• loan

  Money borrowed from the lender with the agreement to repay it back with interest.
• loss

  A situation where expenses exceeds income.
• loss on sale of an asset

  A situation where the money received from selling the asset is less than the carrying amount of that specific asset.
• mark-up

  It is the amount of money that is added to the cost price of inventory to arrive at the selling price.
• marketable securities

  Financial instruments or assets that can be easily bought or sold.
• money market account

  It is a form of savings account offered by banks. It allows the investor to earn interest on the savings while providing limited access to the money/savings.
• matching principle

  The simultaneous recognition of income and related expenses.
• materiality principle

  It is the principle that states that financial information and transactions should be recorded and/or disclosed if they are significant enough to influence the decisions of the users of the financial statements.
• memorandum

  It is a written document used to communicate important information to a specific individual/people/stakeholders.
• Memorandum of Incorporation (MOI)

  It is a document that stipulates the rules and regulations and management of the company.
• miscellaneous entries

  Entries of a variety of things.
• mission statement

  It is a short statement that describes the main purpose and aims of the organization.
• monetary policy

  Policies taken by the central bank to manage and control the money supply, interest rates and financial conditions in the economy.
• mortgage

  It is a form of loan used to buy land and/or buildings.
• mortgage bonds

  It is a financial investment where investors buy a share in a collection of home loans.
• net

  It is the amount after expenditure or deductions have been subtracted.
• net asset value

  It is a measure used to determine the value of investment’s fund’s assets less its liabilities.
• net cash flow

  It is the difference between the cash inflows and cash outflows of an organization for a specific period of time.
• net profit

  The amount earned after subtracting all the expenses and taxes.
• net profit for the year

  The amount earned after subtracting all the expenses and taxes for the year.