What is the difference between assets and liabilities?

Liabilities refer to things that you owe or have borrowed; assets are things that you own or are owed. A liability (generally speaking) is something that is owed to somebody else. Liability can also mean a legal or regulatory risk or obligation. In accounting, companies book liabilities in opposition to assets.

What is an asset in business?

An asset is something that may generate cash flow, reduce expenses or improve sales, regardless of whether it's manufacturing equipment or a patent. Assets can be classified as current, fixed, financial, or intangible. An asset represents an economic resource owned or controlled by, for example, a company.

What are assets and liabilities in a balance sheet?

The balance sheet (or statement of financial position) is one of the three basic financial statements that every business owner analyzes to make financial decisions. A balance sheet reports your firm’s assets, liabilities, and equity as of a specific date. But what are assets and liabilities and what sets them apart?

What are financial assets & liabilities?

Financial Assets: These are assets that derive their value from a contractual claim, such as stocks, bonds, and derivatives. Tangible Assets: These are physical assets that can be touched or felt, such as cash, inventory, and property. What are Liabilities? Liabilities are financial obligations or debts that a business owes to other parties.