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What is the difference between assets and liabilities on a balance sheet?

On the balance sheet, the assets side represents a company’s resources with positive economic utility, while the liabilities and shareholders equity side reflects the funding sources. What are the Components of the Accounting Equation? How Does the Double Entry Accounting System Work?

What are assets & liabilities?

The assets are what allow the company to run. Liabilities and equity make up the right side of the balance sheet and cover the financial side of the company. This is a list of what the company owes. With liabilities, this is obvious – you owe loans to a bank, or repayment of bonds to holders of debt, etc.

Where do assets and liabilities go on a balance sheet?

So, to recap, you'll find the assets (what's owned) on the left of the balance sheet, liabilities (what's owed) and equity (the owner's share) on the right, and the two sides remain balanced by adjusting the value of equity. And there you have it!

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