International Journal of Scientific & Engineering Research, Volume 7, Issue 4, April-2016 ISSN 2229-5518
1920
The relationship between Assets and Liabilities in The Balance Sheet Sultan Alamoudi Abstract: As an abstract to the above discussion, we may summarize that the financial benefit of anything which is possessed by the organization is known as Assets. The financial estimation of an obligation or commitment owed by the organization to some other individual or association is known as Liability. It is being characterized an asset as something that places cash into your pocket. That is, resources create pay. On the other hand, liabilities take cash out of your pocket. Costs not paid with money create liabilities. For instance, the home loan on your house is a risk;
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so is the exceptional parity on your charge cards. An organization monitors the greater part of its exchanges by recording them in records in the organization's general record. Every record in the general record is assigned as to its sort: resource, obligation, proprietor's value, income, cost, increase, or misfortune account.
the
Defining Assets The financial benefit of anything which is possessed by the organization is known as
substance.
Bookkeeping
resources into two general classes which are as per the following:
Assets. In straightforward words, resources
Non-Current Assets
are those questions that can be changed over
Long term Investments
into money or produces wage for the organization sooner rather than later. It is
separates
Tangible Fixed Assets Intangible Fixed Assets Current Assets
useful in paying out an obligation or cost of
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International Journal of Scientific & Engineering Research, Volume 7, Issue 4, April-2016 ISSN 2229-5518
1921
Cash
The bookkeeping recipe is the way twofold
Account Receivable
double entry accounting is built up. The
Investments
bookkeeping recipe, likewise called the
Inventory
monetary record mathematical statement,
Prepaid Expenses
speaks to the relationship between the
Defining Liabilities
benefits, liabilities, and proprietor's value of The financial estimation of an obligation or commitment owed by the organization to some other individual or association is known as risk. In basic words, the liabilities are the obligations emerging out of past
little
business.
It
is
sooner
rather
than
later,
important
to
comprehend the bookkeeping equation to figure out how to peruse an asset report. It is likewise important to comprehend the
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exchanges, which must be paid by the organization
a
bookkeeping recipe to comprehend the relationship
between
the
organization's
money related proclamations.
through the advantages claimed by the element. Bookkeeping separates liabilities
into two general classes which are as per the following: Non-Current Liability
Relationship
between
Assets
and
Liabilities: The
bookkeeping
recipe
basically
demonstrates what the firm claims (its
Long Term Loans
advantages) are bought by either what it
Debentures
owes (its liabilities) or by what its
Current Liabilities
proprietors contribute (its shareholders value
Account Payable
or
Short term Loan
capital).
This
relationship
communicated as a mathematical statement:
Outstanding expenses Bank Overdraft
is
Assets = Liabilities + Owner's Capital
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International Journal of Scientific & Engineering Research, Volume 7, Issue 4, April-2016 ISSN 2229-5518
1922
This mathematical statement needs to adjust
charge sums. The meanings of debit and
on the grounds that everything the firm
credit have been established. The terms
possesses (resources) must be acquired with
retreat to the old manual bookkeeping
something, either a risk or proprietor's
shapes utilized by business as a part of the
capital. Resources allude to things like stock
prior days PCs. Your own checkbook
or records receivable.
register is a case of such a structure. Charges
Maybe a standout amongst the most troublesome ideas to comprehend in starting bookkeeping is the relationship between resources, liabilities, salary and costs. It was
relationship in Robert T. Kiyosaki's book Flow
credits are recorded in the right segment. A few structures, for example, the checkbook register have a running equalization section
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found the clearest clarification of this
Cash
are constantly recorded in the left segment;
Quadrant.
We
should
characterize these terms in a way that is less
to one side of the charge and credit segments. Some bookkeeping course books attempt to show charges and credits as positive and negative which, as I would like to think, causes more perplexity than
demanding to get a handle on.
illumination In
the
twofold
section
bookkeeping
for
the
bookkeeping
understudy.
framework generally utilized by business and taught as a part of bookkeeping classes, the advantages and pay should offset each other. In a dissolvable business, resources gained are recorded as a charge sum; salary is entered as a credit sum. To balance the
Kiyosaki's definition additionally permits the bookkeeping understudy to better see the relationship's in the Basic Accounting Equation: Assets = Liability + Equity
advantage and obligation passages, we enter pay as an acknowledge sum and costs as
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International Journal of Scientific & Engineering Research, Volume 7, Issue 4, April-2016 ISSN 2229-5518
1923
Different names you might see for value are
At last, value or total assets is recorded as a
total assets and held profit. Resources as we
credit sum.
said before, have charge parities; liabilities and value have credit parities. Subsequently, we could revamp the above mathematical statement as
a
precise comparison
records, will
the
bookkeeping
dependably
be
"in
equalization," which means the left side ought to constantly parallel the right side.
Debits = Credits In
In the event that an organization keeps
twofold
section
bookkeeping
framework the aggregate sum of all charge postings must be equivalent to the aggregate
The equalization is kept up in light of the fact that each business exchange influences no less than two of an organization's
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sum credit postings or there is a blunder in
the books. This what we allude to as the
records. For instance, when an organization obtains cash from a bank, the organization's benefits will increment and its liabilities will
books being out of equalization.
increment by the same sum. At the point
To summarize our Findings:
when an organization buys stock for money,
Our Assets place cash in your pocket and are
one resource will increment and one
recorded as charge sums.
resource will diminish. Since there are two
The relating wage is recorded as credit
or
sums.
exchange, the bookkeeping framework is
Liabilities take cash out of your pocket and
records
influenced
by
each
alluded to as twofold section bookkeeping. An organization monitors the greater part of
are recorded as credit sums, and The comparing costs are recorded as charge sums.
more
its exchanges by recording them in records in the organization's general record. Every record in the general record is assigned as to
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International Journal of Scientific & Engineering Research, Volume 7, Issue 4, April-2016 ISSN 2229-5518
its sort: resource, obligation, proprietor's
1924
Difference between assets and liabilities.
value, income, cost, increase, or misfortune
(n.d.). Retrieved from
account.
http://keydifferences.com: http://keydifferences.com/difference-
References
between-assets-and-liabilities.html
Accounting Equation. (n.d.). Retrieved from
Understanding the relationship between
http://bizfinance.about.com: http://bizfinance.about.com/od/accou
assets liabilities income and
ntingpractices/a/Accounting_Equatio
expenses. (n.d.). Retrieved from
n.htm
www.wyzant.com: https://www.wyzant.com/resources/b
Accounting equation explanation. (n.d.).
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logs/10895/understanding_the_relati
Retrieved from
onship_between_assets_liabilities_in
www.accountingcoach.com:
http://www.accountingcoach.com/ac counting-equation/explanation
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come_and_expenses
