Hey im 15 and im new to accounting.
i dont understand a few words such as Assets, Liabilities and Expenses. can some1 describe em for me? i dont understand it when i look at wikipidia xD
Thanks
Assets:
Something of monetary value that is owned by a firm or an individual. All properties, both tangible and intangible, and claims against others that may be applied to cover the liabilities of a person or business. Assets can include tangible items such as cash, stock, inventories, equipment, and real estate as well as intangible items such as property rights or goodwill.
Liabilities:
The state of being liable or something for which one is liable; an obligation, responsibility, or debt. A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation. An obligation to pay an amount in money, goods, or services to another party, also called debt.
Liabilities are the amounts you owe to creditors, or the people and organizations that lend you money.
Expenses:
A particular payment of money; any cost paid for business operation, such as rent, utilities, and payroll.
Generally something spent to attain a goal or accomplish a purpose in connection with production of income, management, conservation, or maintenance of property held for production of income.
It is distinguished from capital expenditure for long-term property and equipments.
An asset is something you can turn into money – i.e. a bike, which you can sell.
A Liability is something that you are responsible for and have to pay, i.e. if you are paying weekly for your bike and still have payments outstanding.
Expenses are things you have to pay out for regularly, i.e. bus fares to school, clothing, etc.
In the business world, expenses are things like staff wages, heating, lighting, etc.
Bit of a simple explanation, but if you grasp this, you can move on. Good luck.
2 Comments: Trackback URL | Comments RSS
November 6th, 2009 at 4:46 pm
Assets:
Something of monetary value that is owned by a firm or an individual. All properties, both tangible and intangible, and claims against others that may be applied to cover the liabilities of a person or business. Assets can include tangible items such as cash, stock, inventories, equipment, and real estate as well as intangible items such as property rights or goodwill.
Liabilities:
The state of being liable or something for which one is liable; an obligation, responsibility, or debt. A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation. An obligation to pay an amount in money, goods, or services to another party, also called debt.
Liabilities are the amounts you owe to creditors, or the people and organizations that lend you money.
Expenses:
A particular payment of money; any cost paid for business operation, such as rent, utilities, and payroll.
Generally something spent to attain a goal or accomplish a purpose in connection with production of income, management, conservation, or maintenance of property held for production of income.
It is distinguished from capital expenditure for long-term property and equipments.
November 6th, 2009 at 10:14 pm
An asset is something you can turn into money – i.e. a bike, which you can sell.
A Liability is something that you are responsible for and have to pay, i.e. if you are paying weekly for your bike and still have payments outstanding.
Expenses are things you have to pay out for regularly, i.e. bus fares to school, clothing, etc.
In the business world, expenses are things like staff wages, heating, lighting, etc.
Bit of a simple explanation, but if you grasp this, you can move on. Good luck.