Welcome to our Skinny Zone Forum!
It is our desire that this forum will add to the enjoyment of its users and bring you even closer to attaining your health goals. We believe there is great value in being a part of a strong, like minded community when striving to reach specific goals. We hope this will be a great tool for you to launch further into finding your own personal Skinny Zone! Reach it – Live it – Keep it!
**Although there will no doubt, be valuable information here from experienced users of the Skinny Zone products you must keep in mind that the information shared by each individual is their own expressed opinion based on the individual’s experiences and/or opinions and are not necessarily the view of Skinny Zone – by Bona Sano Co Inc. Any statement, opinion, or expression made here is not intended to diagnose, treat, cure, or prevent any disease. Please perform your own due diligence in assessing the appropriate use of the information provided.
What is asset and liabilities with example?
In the world of personal and business finance, understanding the relationship between assets and liabilities is the foundation of Accounting Services in Jersey City. At its simplest: assets put money into your pocket, while liabilities take money out.
Here is a breakdown of what these terms mean, how they differ, and real-world examples to help you visualize them.
1. What is an Asset?
An asset is anything of value that you own or control. In financial terms, an asset is expected to provide a future benefit, such as generating income (like a rental property) or increasing in value over time (like a stock).
Types of Assets:
Current Assets: Things that can be converted into cash quickly (usually within a year), such as cash in a savings account or inventory for a business.
Fixed Assets: Long-term resources like real estate, machinery, or vehicles.
Intangible Assets: Valuable things you cannot touch, such as a company’s brand reputation, patents, or copyrights.
Example: If you own a delivery van for your business, that van is an asset. It allows you to complete jobs and earn revenue.
2. What is a Liability?
A liability is a financial obligation or debt that you owe to someone else. It represents a "claim" against your assets and usually requires a future payment of cash, goods, or services.
Types of Liabilities:
Current Liabilities: Debts you need to pay off within a year, such as credit card balances or monthly utility bills.
Long-term Liabilities: Debts that are settled over a longer period, such as a 15-year mortgage or a student loan.
Contingent Liabilities: Potential debts that might occur depending on a future event (like a pending lawsuit).
Example: If you took out a $10,000 loan to buy that delivery van, the loan is a liability. You are legally obligated to pay that money back to the bank.
The "Net Worth" Connection
The relationship between these two is summed up in the Accounting Equation:
If you sold everything you owned (Assets) and paid off everyone you owed (Liabilities), the money left over is your Net Worth.
Practical Example: Imagine you own a house worth $300,000 (Asset), but you still owe the bank $200,000 on your mortgage (Liability).
Asset: $300,000
-
Liability: $200,000
-
Your Equity: $100,000
-
Even though you "own" a $300k house, Accounting Services Jersey City in that house is only $100k because of the liability attached to it.
