Which camera takes better quality pictures?

Nikon P500 or Nikon L120?

P500 across the board

Nikon P500, easily. It has much higher quality.

There really is not a lot of difference image wise as they both have the same 1/2.3" size sensor. The lens might be a bit better on the P500, but it might not be a noticeable difference.

What the P500 gives you is more flexibility, and the ability to take photos in more marginal conditions than the L120.

http://www.althephoto.com

If that all sounds like too much, the Nikon Coolpix L120 offers 21x optical zoom in a more compact body offering point and shoot zoomy action. The Nikkor lens offers up a 25mm wide angle running through to an impressive 525mm at the far end of the zoom. Vibration reduction is again present, as is the funky barrel zoom level on the top.

Unlike the P500, the rear 3-inch LCD display is fixed in place and it takes four AA batteries in the bottom for power. There are fewer controls as this camera is mostly designed to run in full auto mode and there's no viewfinder.