What is assets and liabilities

 What is Assets and Liabilities 

Contents

1. Definition of assets
2. Types of assets
 a. Currrent assets
 b. Non current assets
3. Types of liabilities
 a. Current liabilities
 b. Non current liabilities

 If we want to calculate the net worth of a company or an individual person, then we can calculate the net worth of that company or individual person only after calculating the current market price of Assets and Liabilities.  So what do we have Assets and Liability?  It is very important to know this.

 Definition of Assets

 Assets are those which are owned by a company or an individual.

 There are two types of assets.

 Current Assets
 Non-Current Assets

 Non-Current Assets - Assets that a company wants to hold for more than a financial year.  It is called Non-Curret Assets.  Non-Current Assets are termedd as Long Term Assets.

 In other words, Long Term Assets are those Assets which are held by a Company or Individual for a long period of time or Assets which are kept by a Company for a period of 5 years or more.  It is called Long-Term Assets.

 Tangible Fixed Assets

 Intangible Fixed Assets

 Long Term Investments

 Tangible Fixed Assets - Tangible Fixed Assets are Assets that you can feel, feel and touch.  This type of Assets, also known as Tangible Fixed Assets, is also called Physical Assets in Hindi. Examples of all Tangible Fixed Assets such as your home, Gold, Land & Building, Plant & Machinery, Vehicles etc.

 Intangible Fixed Assets - Intangible Fixed Assets are Assets that you cannot actually see, touch or feel, but they have great importance in your life and your business, because if you are doing a business  If you do, you may need a loan to do Business Increase.

 Suppose you want to take a loan, then you should have credibility.  Meaning you can give the same loan that trusts you, knows you.  Because if there is no compound interest  in anyone  then loaning him is a distant thing, we do not even want to meet him.  In this way, it can be said that your credibility is your goodwill, which is not visible, but it is.  Thus Goodwill is your Intangible Fixed Assets.

 If many companies sell their products, then they get the trade mark, patent, copyright of their product.  So that one can not create his own personal product by scraping the theme of his product  Thus even these Trade Mark, Patent, Copyright are not visible, but still these are all Assets which are called Intangible Fixed Assets in the language of Business.

 Long-Term Investments - Long Term Investment are those that you do for 3 to 5 years in Share Market / Stock Market, Mutual Fund or for a long period of 10 years or you have Land, Property, Machine, Plant, Gold  Purchased Adi for 10-15 years.  So all these Investments are called Long Term Investments.

 Current Assets

 Current Assets - Assets that can be converted to liquid or cash within a financial year or less and can be used to pay Short Term Debt.  This is called Current Assets.  Current Assets are also called Short Term Assets.

 In other words, Short Term Assets are the Assets that a company or individual holds for a financial year or less.  like-



 All these are converted into Cash within a period of less than one year, then all these are called your Short Term Assets.  In short, Short Term Assets are the Assets that you have for a year or less.  There are some types of Current Assets.

 Account Receivable

 Inventory

 Investments

 Cash

 Bank balance

 Prepaid Expenses

 Advance Income Tax

 Now it cannot happen that a company or individual has only and only Assets (assets) and no one asks for or has to give anything to that company or individual.  Whether it is a company or an individual like us, we have to give something to one or the other, it is also left to someone, that is, whenever it comes to giving in business, it is known as Liabilities in the language of accounting.  .  Liabilities mean liability in Hindi.  That means, how much responsibility someone has on a company or an individual, you can guess this by looking at the balance sheet of that company.  There may be obligations such as payment of money or goods or services.

 Like the Assets, Liabilities are of two types.

 Non-Current Liabilities

 Non-current liabilities are such that repayments are made after a financial year or even after a longer period.  In other words, non-current liabilities are liabilities that do not have to be repaid or settled within a financial year.  Non-current liabilities are called.  Non-current liabilities are also called long term liabilities.  .

 Long term borrowings

 Deferred Tax Liabilities

 Other Long Term Liabilities

 Long term provisions

 Current liabilities

 Current Liabilities - The obligations of a company or individual person to be paid in less than one financial year.  This is called Current Liabilities.  Current Liabilities are also called Short Term Liabilities because they have to be paid in very short time.  In other words, Short Term Liabilities are liabilities that you may have to pay immediately.  like:

 Give Driver's Salary on the first date.

 Apart from this, there may need to be a Bill Payment for Light & Electricity.

 Some small expenses that you have to pay in 5 days, 10 days, 15 days or months, three months.

 Salary Paid to your Staff,

 When you purchase goods borrowed from someone, (So in the accounting language from whom you have bought the goods, it is called Creditors or Creditors.) Paying Creditors.

 You have to pay your tax.  e.t.c …

 So all these are called Short Term Liabilities.  Some of the following types of Current Liabilities are-

 Short Term Borrowings

 Account Payable / Trade Payable

 Other Current Liabilities

 Short term provisions

 Bank overdraft

 Outstanding Expenses

 Income tax