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What are Assets and Liabilities?
In any enterprise, assets are the fixed elements while liabilities refer to the obligations which come from transaction processes and previous events. These need a settlement and result in a transfer of assets. Basically, accounting is all about assets and liabilities. You can easily understand accounting once you get an understanding of what these are.
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Why is it essential?
The success of any business depends on how well its current assets are managed. In terms of accounting, liabilities refer to the obligations of any company and it can be an accrual or a legal debt, which is an assessment of the obligation. Liabilities and assets can assist you in studying the general concepts of accounting. In order to prepare a balance sheet, you should have an understanding of which items fall under assets and which ones come under liabilities.
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