ASSETS
Assets are items with money value that are owned by a business. Some examples are: cash, accounts receivable (selling goods or services on credit), equipment (office, store, delivery, etc.), and supplies (office, store, delivery, etc.).
LIABILITIES
Liabilities are debts owed by the business. Paying cash is often not possible or convenient, so businesses purchase goods and services on credit. The name of the account used is Accounts Payable. Another type of liability is Notes Payable. This is a formal written promise to pay a specific amount of money at a definite future date.
OWNER’S EQUITY
The difference between Assets and Liabilities is Owner’s Equity. The can also be called capital, proprietorship, or net worth.
Liabilities are debts owed by the business. Paying cash is often not possible or convenient, so businesses purchase goods and services on credit. The name of the account used is Accounts Payable. Another type of liability is Notes Payable. This is a formal written promise to pay a specific amount of money at a definite future date.
OWNER’S EQUITY
The difference between Assets and Liabilities is Owner’s Equity. The can also be called capital, proprietorship, or net worth.
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