Cubic centimeters (cc) or L in case of an internal combustion engine, is a measure of the combustion space in the cylinders. In other words, these terms define the size of the engine. Engine size is measured by removing the cylinder head and filling water in the cylinder by pushing the piston down till its lowest point in the cylinder or BDC (Bottom Dead Centre). The L or CC of liquid displaced when the piston is returned to its topmost position in the cylinder Or TDC (Top Dead Centre) is the measure of combustion volume of the cylinder.
A 3.5 L car has an engine which can displace 3.5 ltrs or 3500 CC of air & fuel mixture (Combustion Volume).