An asset is a resource of ownership (both tangible and intangible) that helps a business generate revenue or grow its operations. Examples include cash, inventory, property, patents, and brand reputation. Assets appear on the left-hand side of a traditional company balance sheet.
A liability is a financial obligation that a business owes to another party. Examples include loans, accounts payable, mortgages, deferred revenue, bonds, and warranties. Liabilities appear on the right-hand side of the balance sheet alongside shareholders’ equity.
