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last in first out (LIFO)
Assumes that the last item of stock received is the first
to be used. In the UK it is a little-used method of pricing
the issue of material using the purchase price of the latest
unit in stock. It is used more often in the USA as a method
of valuing stock using indices to charge most recent prices
against profits.
leave of the court
This is where the court will make a decision after hearing
all the relevant information.
letter of credit
A document issued by a bank on behalf of a customer authorising
a third party to draw funds to a specified amount from its
branches or correspondents, usually in another country,
when the conditions set out in the document have been met.
liabilities
An entity's obligations to transfer economic benefits as
a result of past transactions or events (FRS 5).
life cycle costing
The maintenance of physical asset records over the entire
asset life, so that decisions concerning the acquisition,
use or disposal of the asset can be made in a way that achieves
the optimum assets usage at the lowest possible cost to
the business. The term may be applied to the profiling of
cost over a product's life, including the pre-production
stage and to company and industry life cycles.
limited company
A limited liability company is one in which the liability
of members for the company's debts is limited to the amount
paid and, if any, unpaid on the shares taken up by them.
limiting factor (or key factor)
Anything which limits the activity of an entity. An entity
seeks to optimise the benefit it obtains from the limiting
factor. Examples are a shortage of supply of a resource
or a restriction on sales demand at a particular price.
linear programming
The use of a series of linear equations to construct a mathematical
model. The objective is to obtain an optimal solution to
a complex operational problem, which may involve the production
of a number of products in an environment in which there
are many constraints.
liquid resources
Liquid resources, or liquid assets, are cash, and other
assets readily convertible into cash, for example short-term
investments.
loan capital
Also called debt, relates to debentures and other long-term
loans to a business.
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