Liability's opposite on a balance sheet

[riya]

Hi everyone! I’m trying to get a better understanding of how the balance sheet works, especially the basic structure. I know liabilities represent what a business owes, but I’m a bit confused about what exactly is considered the opposite of a liability.

 

[maria]

he opposite of liabilities on a balance sheet is assets.
Assets = Liabilities + Equity

• Assets are what the company owns (e.g., cash, inventory, equipment).
• Liabilities are what the company owes (e.g., loans, accounts payable).
• Equity represents the owners’ residual interest after liabilities are subtracted from assets.

So, while liabilities reflect obligations, assets represent value or resources the company controls.

 

[Jarwish]

Liability on a balance sheet is the reverse of an asset. Liabilities are basically what a company owes, whereas assets are what it owns. Examples of assets are cash, inventory, property, and receivables; and on the other hand, examples of liabilities are debts and obligations. The balance sheet equation is Assets = Liabilities + Equity.