6 Difference between Assets and Liabilities

Assets and liabilities are the two terms which are used in the business. No business is successful without assets and the Liabilities. Assets are the owns of the company which generates income for the company. While liability are may loans and other debts on the company or firms which have to be paid by the firm or company.

These days businessman is the person who has many assets which generates income for that person. If someone has no assets but he/she wants to start a business in that case person go towards the loans from the banks or from other sources of debts. Assets and liabilities are very important to understand. In this article we will discuss in detail about assets and liabilities. And the difference between assets and liabilities.

Assets vs liabilities

Sr. No.	Assets	Liability
1	Assets are the owns of the person or business which are used convert in money whenever needed for the business.	Liabilities are the debts or loans on the company which have to be paid in future.
2	Assets provides economic benefits in future	Liabilities has to settle in future.
3	Value of assets decrease with time.	The value of liabilities increases with time.
4	Assets comes under debits balance	Liabilities comes under the credit balance
5	Assets is inflow of the cash flow.	Liability are the outflow of the cash.
6	Cash, land, buildings, investments and outlets etc.	Taxes, wages, loans, interests etc .

Assets

Assets are the owns of a person and business which generates income or helps in his business. These assets may be trucks for his material transportation, Outlets, and store at different places and properties are considered as assets of the company. The things which are capable to generate money very shortly when needed for the business is known as assets. In hard times these assets are used to pay debts and liabilities.

Types of assets

1. Current assets
2. Non-current assets

Liabilities

Liabilities are the debts or loans which has to be by the person or firm in future. These days everyone wants to start business. The person with money easily starts the business and person with out money go for loans and other sources of debt. These debts and the loans known as the liabilities. Mostly liabilities arise due to the past transections. Liabilities became insolvency and bankruptcy in future.  Some liabilities like suppliers’ payments, taxes, wages and short-term loans.

Main differencee between assets and liabilities.

1. Assets are the owns of the person or business which are used convert in money whenever needed for the business. While liabilities are the debts or loans on the company which have to be paid in future.
2. Assets provides economic benefits in future and liabilities has to settle in future.
3. The value of assets decreases with time. While the value of liabilities increases with time.
4. Assets comes under debits balance while liabilities come under the credit balance.
5. Assets is inflow of the cash flow. While liability is the outflow of the cash.
6. Assets are cash, land, buildings, investments and outlets etc. Liabilities taxes, wages, loans, interests etc.

Conclusion

Assets and liabilities play an important role in the successful business. Assets are the back bones for the business. Assets are used in the hard times to decrease liabilities. Liabilities are the debts which generally used in staring days of the business. With the poor management of the Liabilities it increases with time. So for the successful business liabilities should be very less.

This is all about the difference between assets and the liability. We hope you get the point. For any doubts please free to comment on us. For more interesting topics like this please go through our website.