Assets and Liability

Assets

In business and accounting, assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower. The balance sheet of a firm records the monetary value of the assets owned by the firm. It is money and other valuables belonging to an individual or business. The two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses, including financial assets and fixed assets. Financial assets include such items as accounts receivable, bonds, stocks and cash; while fixed assets include such items as buildings and equipment. Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs.

Liability

In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage. It can also be used as a slang term to describe someone that puts a team or group of which they are a member at a disadvantage, and would thus be better off without.

In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

* All type of borrowing from persons or banks for improving of a business or person income which is payable during short or long time.

* They embody a duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services or other yielding of economic benefits, at a specified or determinable date, on occurrence of a specified event, or on demand;

* The duty or responsibility obligates the entity leaving it little or no discretion to avoid it; and,

* The transaction or event obligating the entity has already occurred.

* All type of borrowing from persons or banks for improving of a business or person income which is payable during short or long time.

Liabilities in financial accounting need not be legally enforceable; but can be based on equitable obligations or constructive obligations. An equitable obligation is a duty based on ethical or moral considerations. A constructive obligation is an obligation that can be inferred from a set of facts in a particular situation as opposed to a contractually based obligation.

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