Assets are on the left side called DR while CR is for Liabilities
Explanation: An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit. Assets are reported on a company's balance sheet and are bought or created to increase a firm's value or benefit the firm's operations. Examples of Assets
Current Assets
Current assets are short-term economic resources that are expected to be converted into cash within one year. Current assets include cash and cash equivalents, accounts receivable, inventory, and various prepaid expenses.
While cash is easy to value, accountants periodically reassess the recoverability of inventory and accounts receivable. If there is evidence that accounts receivable might be uncollectible, it'll become impaired. Or if inventory becomes obsolete, companies may write off these assets.
Assets are recorded on companies' balance sheets based on the concept of historical cost, which represents the original cost of the asset, adjusted for any improvements or aging.
Fixed Assets
Fixed assets are long-term resources, such as plants, equipment, and buildings. An adjustment for the aging of fixed assets is made based on periodic charges called depreciation, which may or may not reflect the loss of earning powers for a fixed asset.
Generally accepted accounting principles (GAAP) allow depreciation under two broad methods. The straight-line method assumes that a fixed asset loses its value in proportion to its useful life, while the accelerated method assumes that the asset loses its value faster in its first years of use.
Financial Assets
Financial assets represent investments in the assets and securities of other institutions. Financial assets include stocks, sovereign and corporate bonds, preferred equity, and other hybrid securities. Financial assets are valued depending on how the investment is categorized and the motive behind it.
Intangible Assets
Intangible assets are economic resources that have no physical presence. They include patents, trademarks, copyrights, and goodwill. Accounting for intangible assets differs depending on the type of asset, and they can be either amortized or tested for impairment each year.Assests -Machinery ,Building, Motor Vehicle, Capital while liabilities are as follows-
Liabilities are those amounts owed by a business at any one time. Liabilities are often expressed as Payables for accounting purposes. Unless you are running a complete cash business (paying and collecting only cash), you probably have liabilities.
How Liabilities Work
When you buy anything for your business, you pay either with cash from your checking account or you borrow, and all borrowing creates a liability. Buying on a credit card is also borrowing unless you pay off the credit card before the end of the month. Of course, getting a business loan or a mortgage on a business property you own counts as a liability.
Your business can also have liabilities from activities like paying employees and collecting sales tax from customers. These liabilities are called trust fund taxes because you are holding them in trust and your business must count them as liabilities until they are paid.
The Different Types of Liabilities
Long-Term Liabilities
Long-term liabilities are listed first. They are the obligations of the business which are expected to continue for more than one year. These include loans payable and mortgages payable.
Short-Term Liabilities
Short-term liabilities sometimes called current liabilities) are those obligations of the business which are expected to be paid off within a year. These include
Sales taxes payable: These amounts are collected from customers at the time of sale and held until due to be paid to the appropriate state revenue department.
Payroll taxes payable: These amounts are collected from employees (withholding from income taxes and for employment taxes) and set aside by the employer, to be paid at the appropriate time to the IRS or state tax agencies.
Loans and mortgages payable: These are the monthly payments on loans and mortgages.
