Assets, Liabilities, and net worth are part of the language of finance. As such, it is important to understand both their composition and how they fit together.
What Are Examples of Assets?
Assets are economic resources that have expected future benefits to the business. All of the following are typical business Assets: Cash, accounts receivable, inventory, land, building, and Equipment.
What Are Examples of Liabilities?
Liabilities are outside claims consisting of economic obligations or debts, payable to outsiders. All of the following are typical business Liabilities: Accounts payable, payroll taxes due, notes payable, mortgage payable, and bonds payable.
What Are the Different Forms of Net Worth?
Insider claims are called owner’s equity, or net worth. It is labeled in for-profit organizations as an owner’s equity and non profit organizations will use a different term such as fund balance.