Question

Assets are always equal to the total of liabilities and capital. Explain. ​

Answer 1

Explanation:

In simple terms,

Assets are what you have that have its own worth and no matter what, you can sale it in the open market.

Now to get these worthy things you obviously need money (*it may be in the form of cash or any other form acceptable by the other party) or you can get it in credit.

The money you need to buy these assets may be your own or if you don't have sufficient funds by yourself you can get it from others (loan).

Hence, the total assets you have can either be acquired by your own funds(capital) or borrowed money(liabilities).

So in any case the total of your assets will always be equal to the total of you capital and liabilities. That's why a balance sheet is called what is it called as because both of it's sides will always get themselves balanced with each other

Answer 2

Assets=Capital+liability

Reason being ,

The assets can be bought only through two way either by capital( investment of money by proprietor ) or by credit (liability).