Assets and liabilities that reflect the acquisition or formation of funds in enterprises and institutions are called assets, and those that reflect the use and existence of funds are called liabilities. Modern capitalist enterprises and banks generally use the balance of assets and liabilities to reflect the financial situation of a certain date (such as the end of the month, the end of the quarter and the end of the year), which is regarded as the most important accounting statement. The table is divided into two parts: assets, liabilities and owners' equity, and each part has several items. The assets section is on the left, reflecting all the property, materials, creditor's rights and rights of the enterprise. Liabilities and owners' equity are listed on the right, reflecting various short-term and long-term debts, self-owned capital and surplus of the enterprise. The total amount of the left and right parties is equal and balanced.

1. A house is an asset, so is a car, and so are many other things around us. We only know that many things are worthless when we use them as collateral. This is wrong, they are all liabilities. An asset is an asset only if it is pocketed. If something keeps taking income from its pocket, it is a liability. In this way, the house is in debt, and the house needs to repay the loan, pay for water and electricity, and maintain it. The same is true of cars, which need to pay insurance. Many other things are liabilities. It is particularly important to distinguish between assets and liabilities, otherwise we won't know what we are buying. As long as the income generated by assets is greater than your expenditure, you can say that you are financially free.

2. The balance sheet, also known as the statement of financial position, is a main table in our financial statements, which reflects the main accounting statements of the financial position of the enterprise on a specific date and is the static performance of the business activities of the enterprise. The so-called static performance is like a person holding a camera. The moment he clicks on the balance sheet is the financial status of the enterprise on the balance sheet date, which refers to the asset status of the enterprise at a certain point.

3. From the accounting point of view, debt refers to the current obligations that are formed by units or individuals due to past transactions and events and are assumed by units or individuals, which are expected to lead to the outflow of economic benefits from accounting, including various loans, payables and advance receipts. Sometimes it also refers to the debt owed; Try to pay off all debts. From an economic point of view: funds that must be returned. In addition to the borrowed funds, if bonds are issued, the principal and interest (principal+interest) must be returned, which is also called debt. Failure to pay debts is called non-performance of debts. In addition, the rise of debt-owned capital is called debt exceeding.

Assets are things that can put money in your pocket, while liabilities are things that can take money out of your pocket. If you want to become rich, you should buy as many assets as possible, and increase the amount of assets put in your pocket-increase asset income, reduce liabilities and reduce the money taken out of your pocket-expenditure. When our asset income can be steadily greater than our expenditure, we begin to use money to generate money.