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What does it mean? |
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| Assets are items possessed by a business that will provide it benefits in future. | Liabilities are items that are obligations for a business |
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Impact of Depreciation |
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| Assets are depreciable in nature | Liabilities are non-depreciable in nature |
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Formula used |
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| Assets = Liabilities + Shareholder’s Equity | Liabilities = Assets – Shareholder’s Equity |
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Impact on cash flow |
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| It is responsible for generation of cash flow for a business | It is responsible for outflow of cash from a business |
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Different Types |
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| The different types of assets are tangible, intangible, current and noncurrent | The different types of non-current liabilities are long term(non-current) and current liabilities |
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Examples |
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| Cash, Account Receivable, Goodwill, Investments, Building, etc., | Accounts payable, Interest payable, Deferred revenue etc. |
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