27 Banking Awareness Assets and Libilities

Banking Awareness
Assets and Libilities

Banking Awareness
Assets and Liabilities
Assets and Libilities
Assets:
An asset is something of value that is owned and can be used to produce
something. The assets are items that the bank owns. This includes loans, securities, and
reserves.
Types of Assets:
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Tangible Assets: Tangible Assets are in Physical form which includes cash, inventory,
vehicles, equipment, buildings and investments.
Intangible Assets: Intangible Assets are not in Physical nature includes patents, copyright,
franchises, goodwill, trademarks, and trade names, as well as software. It is very difficult to
evaluate.
Current Assets: Current assets are all the assets of a company that are expected to be sold
or used as a result of standard business operations over the next year. Current
assets include cash, cash equivalents, accounts receivable, stock inventory, marketable
securities, pre-paid liabilities, and other liquid assets.
Fixed Assets: Fixed assets are long-term assets that a company has purchased and is
using for the production of its goods and services. Fixed assets can include buildings,
computer equipment, software, furniture, land, machinery, and vehicles.
Operating assets: Operating assets are assets that are required in the daily operation of a
business. In other words, operating assets are used to generate revenue from a company’s
core business activities.
Non-operating assets: Non-operating assets are assets that are not required for daily
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business operations but can still generate revenue.
Liabilities:
Liabilities are items that the bank owes to someone else, including deposits
and bank borrowing from other institutions. Liabilities are what the bank owes to others.
Specifically, the bank owes any deposits made in the bank to those who have made them.
Types of Liabilities:
Current Liabilities: Current liabilities are a company's short-term financial obligations that
are due within one year or within a normal operating cycle. Examples are accounts payable,
short-term debt, dividends, and notes payable as well as income taxes owed.
Working capital = Current assets – Current liabilities
Non-Current Liabilities: Non-current liabilities (long-term liabilities) are liabilities that are due
after a year or more. Examples of noncurrent liabilities include long-term loans and lease
obligations, bonds payable and deferred revenue.
Contingent Liabilities: Contingent liabilities are liabilities that may or may not arise,
depending on a certain event. Potential lawsuits, product warranties, and pending
investigations are some examples of contingent liability.
Some of the differences between Assets and Liabilities:
Particulars Assets Liabilities
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Definition Assets are resources Liabilities are your
(tangible and intangible) business' debts or
that your business owns, obligations which you
and that can provide you need to fulfil in the
with future economic future. This is the
benefit. They add value money you need to
to your business, they repay, the goods you
can help you meet your need to provide or the
commitments and services you need to
increase your equity. perform. These
responsibilities arise out
of past transactions and
need to be settled
through the company's
assets.
Definition in Simple Assets means any Liability means any
Words property owned by a debt which a company
company that has owes to a person or an
monetary value is known organization
as an asset.
Depreciation From time to time Not Depreciated
Examples Accounts Receivable, Accounts Payable,
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Machinery, Cash, Bank Overdraft,
Furniture Outstanding Expenses
Classification Fixed Assets, Current Long-term Liabilities,
Assets, Liquid Assets, Fixed Liabilities,
Wasting Assets, Contingent Liabilities
Intangible Assets, and Current Liabilities
Fictitious Assets
Calculation Capital + Liabilities Assets- Capital
Financial Accounting Assets get debited if Liabilities tend to get
there is an increase credited if there is an
increase in their
amount.
Business aspect Assets are considered as Liabilities give rise to an
good from a business outflow of cash over the
point of view since it coming years, due to
generates an inflow of which it is considered
cash over the coming bad from a business
years point of view.
Balance Sheet While making the Once all the assets are
balance sheet, all the computed, the liabilities
assets are placed first are placed.

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Banking Awareness

Assets and Libilities

Assets and Libilities

An asset is something of value that is owned and can be used to produce

vehicles, equipment, buildings and investments.

securities, pre-paid liabilities, and other liquid assets.

computer equipment, software, furniture, land, machinery, and vehicles.

core business activities.

business operations but can still generate revenue.

Working capital = Current assets – Current liabilities

obligations, bonds payable and deferred revenue.

depending on a certain event. Potential lawsuits, product warranties, and pending

investigations are some examples of contingent liability.

Some of the differences between Assets and Liabilities:

Particulars Assets Liabilities

Definition Assets are resources Liabilities are your

(tangible and intangible) business' debts or

that your business owns, obligations which you

and that can provide you need to fulfil in the

with future economic future. This is the

benefit. They add value money you need to

to your business, they repay, the goods you

can help you meet your need to provide or the

commitments and services you need to

increase your equity. perform. These

responsibilities arise out

of past transactions and

through the company's

Definition in Simple Assets means any Liability means any

Words property owned by a debt which a company

company that has owes to a person or an

monetary value is known organization

Depreciation From time to time Not Depreciated

Examples Accounts Receivable, Accounts Payable,

Machinery, Cash, Bank Overdraft,

Furniture Outstanding Expenses

Classification Fixed Assets, Current Long-term Liabilities,

Assets, Liquid Assets, Fixed Liabilities,

Wasting Assets, Contingent Liabilities

Intangible Assets, and Current Liabilities

Calculation Capital + Liabilities Assets- Capital

Financial Accounting Assets get debited if Liabilities tend to get

there is an increase credited if there is an

Business aspect Assets are considered as Liabilities give rise to an

good from a business outflow of cash over the

point of view since it coming years, due to

generates an inflow of which it is considered

cash over the coming bad from a business

years point of view.

balance sheet, all the computed, the liabilities

assets are placed first are placed.

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