Sep 29, 2009

Asset vs Liability

What does the word asset and liability mean to you? For academician and accountant, asset are catogarized into difference type, such as fixed asset, current asset, liquid asset, financial asset and so on. For those who study accounting and finance you know how tough it is when come to reconciliation of financial statement. But in real world, just make it simple and this is my opinion. Anything that puts money into your poket, it's an asset. Anything that drains out money out of your pocket, it's a liability.

If you purchase a vehicle, would you consider it as an asset? How about purchasing a house? To me, as lot as it draining out the money from our pocket it never been an asset. So if we keep on paying monthly instalment for the vehicle we purchase then it is a liability. Unless that vehicle generate positive income especially to business owner then it is an asset.

Some people bought second or even third house as an investment. This property infact is not an asset as long as it don't generate income to them. Not until the sell off the house and get net income or rent out the house at the higher rental fee comparing to the monthly instalment. Eitherwise they have to settle the monthly instalment and other charges and at this point it is a liability to them.

That why the rich acquire assets while the poor and middle class acquire liabilities. Therefore it is very important for us to have a clear understanding and know the difference between an asset and liability.

31 comments:

Unknown said...

Hahahhaha... you simplify the asset and expenses. I'm an accountant.. I understand what you mean. I dont need to explain more.. just make it simple.. earn and spend them out, no worries..hehehehe

Jay said...

hehehe... thank for spending your precious time reading. always make life simple...and enjoy what we have.

Unknown said...

Very good points on differentiating assets from liabilities.

Coffee Girl said...

I prefer to be wealthy, not rich. :-)

Jay said...

why not both wealthy and rich at the same time.

babYpose said...

I categorised my friends, the nice ones are my asset :) Informative, thank you.

Anonymous said...

buy alprazolam how to buy xanax without rx - xanax drug overdose

Anonymous said...

ativan no prescription side effects of lorazepam 1mg - buy lorazepam online no prescription needed

Anonymous said...

buy ativan online ativan 8 mg - generic form of ativan

Anonymous said...

buy valium purchase valium online no prescription - no prescription valium online buy

Anonymous said...

where can i buy xanax online legally side effects xanax xr 2mg - much does generic xanax cost without insurance

Anonymous said...

no prescription xanax xanax overdose with alcohol - order xanax online mastercard

Anonymous said...

zolpidem no prescription where to buy zolpidem - zolpidem 6 mg

Anonymous said...

order valium no prescription generic valium yellow pill - valium side effects skin rash

Anonymous said...

buy diazepam diazepam dosage vs alprazolam - veterinary uses diazepam

Anonymous said...

buy zolpidem ambien cr generic coupon - overdose de zolpidem

Anonymous said...

diazepam 10 mg diazepam 5mg withdrawal symptoms - buy diazepam 10mg

Anonymous said...

diazepam overdose buying diazepam online for cheap - diazepam dosage nhs

Anonymous said...

generic lorazepam ativan vs. xanax for panic attacks - ativan side effects yahoo

Anonymous said...

diazepam without a prescription diazepam 5mg does do - diazepam 10mg ardin

Anonymous said...

buy xanax online xanax side effects list - xanax just makes me sleepy

Anonymous said...

generic valium names buy valium online prescription - generic valium same valium

Anonymous said...

buy soma carisoprodol synthesis - medication stronger than soma

Anonymous said...

cheap generic valium valium and anxiety - valium + zoloft + side effects

Anonymous said...

ambien online generic ambien good regular ambien - ambien india pharmacy

Anonymous said...

buy ambien online ambien generic - ambien generic otc

Anonymous said...

buy valium diazepam valium dosage compared to xanax - valium effect high blood pressure

Anonymous said...

buy valium online buy cheap valium uk - makes best generic valium

Anonymous said...

6, klonopin for sale - klonopin online pharmacy http://www.klonopinsaleonline.com/#generic-klonopin-online, [url=http://www.klonopinsaleonline.com/#klonopin-online-sale]generic klonopin online[/url]

Anonymous said...

2, purchase lasix - lasix pills online http://www.lasixordernow.net/, [url=http://www.lasixordernow.net/]cheap furosemide [/url]

Anonymous said...

1, [url=http://www.maxaltonlinehelp.net/] Maxalt For Sale [/url] - Buy Maxalt - order maxalt online http://www.maxaltonlinehelp.net/.

click here for more info

LinkWithin

Related Posts with Thumbnails