A debt owed by an organisation. Examples include: Creditors, hire purchase, mortgage and overdraft.


A systematic collection of individual accounts. See also General Ledger.

Limited liability

A typical feature of a company where the satisfaction of obligations is limited to the resources of the company, and ordinarily cannot be extended to the shareholders of the company. This feature protects the private resources of the individual shareholders.


Last In Last Out. A method of valuing of stock.


The process of using borrowed funds to generate income at a rate of return that is higher that the cost of the borrowed funds. For example an organisation may borrow funds at 16%, investing the funds in new production equipment that is expected to generate a rate of return of 25%. See also strategic leverage.

Landed cost

The total costs involved when importing goods. They include buying. shipping. insuring and associated taxes.


The worker’s input (and their cost) into the manufacture of a product, often separated into direct labour (that which goes directly into the product such as time required to solder an integrated circuit to a motherboard) and indirect labour (that which is used in maintaining the manufacturing environment such as equipment maintenance). Indirect labour is usually part of the overhead component of cost. The term labour when used without the direct or indirect qualifier usually refers to direct labour.

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