Question

State the difference between Assets and Liabilty ​

Answer 1

Answer:

Assets

• Assets are items possessed by a business that will provide it benefits in future.

• Assets are depreciable in nature
• Assets = Liabilities + Shareholder’s Equity
• It is responsible for generation of cash flow for a business
• The different types of assets are tangible, intangible, current and noncurrent
• Cash, Account Receivable, Goodwill, Investments, Building, etc.,

Liabilities

• Liabilities are items that are obligations for a business
• Liabilities are non-depreciable in nature
• It is responsible for outflow of cash from a business
• The different types of non-current liabilities are long term(non-current) and current liabilities
• Accounts payable, Interest payable, Deferred revenue etc.

Answer 2

Answer:

Assets are the items your company owns that can provide future economic benefit. Liabilities are what you owe other parties. In short, assets put money in your pocket, and liabilities take money out!