Assets and liabilities are two important financial terms used in accounting. They refer to different aspects of a company's finances, such as ownership, debt, and obligations. In this article, we will explore the difference between assets and liabilities and how they affect a business.
About Difference Between Assets And Liabilities
| Assets | Liabilities |
|---|---|
| Things owned by a company or individual. | Debts and obligations owed to others. |
| Include cash, investments, property, etc. | Include loans, accounts payable, etc. |
| Increase on balance sheet with purchases. | Decrease on balance sheet with payments. |
| Used to generate income. | Result in expenses. |
| Represents the value of a business. | Represent what is owed by a business. |
| Help finance operations. | Reduce cash flow. |
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