Virtual memory limit corresponds to the amount of memory processes can allocate within LVE. You can see individual process virtual memory usage by monitoring VIRT column in topoutput for the process.
When process tries to allocate more memory, it checks if the new total virtual memory used by all processes within LVE is more then a limit set. In such case, it will prevent memory from being allocated and increments fVMEM counter. In most cases, but not all of them - this causes process to fail. For CGI/PHP scripts it will usually cause 500 and 503 error.
To check memory usage,
1) log into cPanel
2) memory usage show on the Stats column as below