DREAM BIG What is an Asset? What is a Liability? In its simplest form, your balance sheet can be divided into two categories: assets and liabilities. 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! Assets vs. Liabilities Assets add value to your company and increase your company's equity, while liabilities decrease your company's value and equity. The more your assets outweigh your liabilities, the stronger the financial health of your business. But if you find yourself with more liabilities than assets, you may be on the cusp of going out of business. Examples of assets are - Cash Investments Inventory Office equipment Machinery Real estate Company-owned vehicles Examples of liabilities are - Bank debt Mortgage debt Money owed to suppliers (accounts payable) Wages owed Taxes owed #assetvsliability #share @createyourdestiny