Apr 302007
An asset is something valuable which a business owns or has the use of, such as factories, office buildings, vehicles, computers, stock and so on.
A liability is something which is owed to somebody else. A liability is a debt of the business, such as a bank loan or overdraft, amounts owed to suppliers or taxation owed to the government.
Capital is a special liability. Capital the money that the owners put into a business, with the intention of earning a return. Therefore, capital is money that is owed to the owners by the business.
