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Welcome to our Glossary section! We are very happy to see you here! This is the place where we will do our best to include as many terms from the accounting and financial world as possible so that we fully respond to your research and business needs.

Our team will constantly work on the content so that we make sure that you always stay satisfied with the information you obtain. We have sorted the terms alphabetically so that it is convenient for you to navigate through the section. In addition, we have integrated a special division dedicated to curious terms from the stock market. We hope you find them as much enjoyable as we do.

Sb Team wishes you a pleasant and fruitful navigation through our Glossary section!

Law of demand: A relation between the product’s or the service’s price and the volume of demand. The lower the price of a certain product or service, the higher is the demand for it.

Law of supply: A relation between the product’s or the service’s price and the volume of supply. With the increase of the price, the level of supply also increases and the opposite – with the price going down, the volume of the supply also decreases.

Leverage: A money loan which purpose is to increase the profitability of the invested capital.

Liquidity effect: A decrease in the interest rates as a result from the increase in the money volumes.

Liquidity: The extent to which a certain asset can be turned into money for a short period of time and with minimum losses. This is also the bank capability to perform payments in every single moment.

Labour market: The relationship between employers and employees when buying and selling labour.

Labour-intensive production: A term used when measuring the labour expenses for a production unit.

Labour-saving innovations: A technological innovation in production which leads to an increase in the profit at the expense of the salaries.

Liabilities: Obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Leasing contract: An agreement, which settles that the lessor provides to the lessee the right of using a certain asset for a certain period of time against one-time payment or serious of payments – installments.

Leasing contract: An agreement, which settles that the lessor provides to the lessee the right of using a certain asset for a certain period of time against one-time payment or serious of payments – installments.

Loss from impairment: An amount with which the balance value of the asset exceeds its recoverable value.

Legal obligation: An obligation which arises from a contract, legislation or other law acts.

Limited liability company: This is a form a business structure which comprises of one or more than one owners. LLCs are popular because owners have limited personal liability for the debts and actions of the LLC which liability is defined by the size of their participation in the company’s capital.

Liquidation: Liquidation occurs when a business or firm is terminated or bankrupt, its assets are sold and the proceeds pay creditors. Any leftovers are distributed to shareholders.

Limit order: Order for purchase or selling of a certain amount of a financial asset when reaching a certain price. There can be set also a certain period of time during which the order to be active.

Liquidator: A person who buys a certain company with the purpose to make profit out of the sale of its assets in pieces. The liquidators mainly rely on the difference of the prices of the company as a whole and if sold in pieces.

Legal tender: Cash issued by the Central bank or by the Commission of the Monetary funds.

Lump-sum tax: A tax which remains unchanged, regardless of the activity and the condition in which the payer is. This tax increases the fixed costs, but the collective expenses remain unchanged. As a result the production and the price of the production of one highly effective company are not influenced by this tax for a short period of time

Last in, first out: Policy for hiring employees, according to which the first to be fired are the last hired people.

Luxury: High value good or service, which is purchased and used by people with high level of income. The luxury goods and service are expected to be ones of higher quality and which have attributes to demonstrate high level of social status.

Lockout: A restriction of the employees to go to their work places made by the employer, which is no force until they agree with the proposed by him working and payment conditions.

Loss leader: Selling a certain good or service at a price which is below the value of its production costs with the purpose of attracting more clients in certain retail. This is usually done by supermarkets.

Local taxes: Additional taxes on top of state taxes, usually collected in the form of property taxes. They are also called “municipal tax” and they cover everything from garbage pickup to cutting the grass at your local park.

Lag: The time period which exists between the change in the value of a certain economic element and the appearance of the effect from this change. For example, lag is the time between the income tax decrease and the increase in the market demand. The lag can be technological, psychological or institutional. It can be most clearly seen in the fiscal policy where a certain period of time is necessary for the legislation and institutional behavior to adjust to each other.

Labour market rigidities: Applying restrictions on the free determining of the salaries in every firm or region, as well as on the free movement of workers and employees. Such restrictions are usually a result of the remunerations’ fixing at a national level. The main results coming from them are big differences in the employment levels in the different regions and a high inflation of the salaries.