हिंदी

Basic Terms in Accounting - Concepts of Assets, Liabilities and Net Worth

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Topics

  • Stakeholders in Commercial Organisations
    • Meaning of Stakeholders
    • Distinction Between Stakeholders and Shareholders
    • Distinction Between Stakeholders and Customers
    • Internal and External Stakeholders
    • Expectations of Stakeholders
    • Stakeholders Analysis
  • Marketing
  • Marketing and Sales
    • Concept of Marketing
    • Objectives of Marketing
    • Importance of Marketing
    • Comparison Between Marketing and Selling
    • Product and Service
    • Differences Between Products and Services
    • Pricing
    • Objectives of Pricing
  • Advertising and Sales Promotion
    • Meaning of Advertising
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    • Importance and Merits of Advertising
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    • Social Advertising Media
    • Concept of Sales Promotion
    • Role of Sales Promotion
    • Techniques of Sales Promotion
  • Consumer Protection
    • Concept of Consumer Protection
    • Importance of Consumer Protection
    • Consumer Exploitation
    • Types of Consumer Exploitation
    • Importance of Consumer Awareness
    • Methods of Consumer Protection
    • Consumer Protection Act, 2019
    • Consumer Rights
    • Basic Concepts Under the Consumer Protection Act
    • Remedies Available to a Consumer
    • Establishment of Central Consumer Protection Authority (Ccpa)
    • Machinery for Redressal of Consumers' Grievances
  • E-commerce
    • Benefits of E-commerce Over Traditional Commerce
    • E-Tailing
    • E-advertising
    • E-Marketing
    • E-security
  • Finance and Accounting
  • Capital and Revenue Expenditure/Income
  • Final Accounts of Sole Proprietorship
  • Fundamental Concept of Cost
    • Cost Concepts > Total Costs
    • Elements of Cost
    • Classification of Costs
    • On the Basis of Nature
    • On the Basis of Behaviour
    • On the Basis of Control
    • Other Types of Cost
  • Budgeting
    • Budgeting
    • Comparison Between Budgeting and Forecasting
    • Utility of Budgets
    • Limitations of Budgets
    • Concept of Cash Flow Statement
    • Distinction Between Funds Flow Statement and Cash Flow Statement
  • Sources of Finance
  • Human Resources
  • Recruitment, Selection and Training
    • Recruitment
    • Sources of Recruitment
    • Methods of Recruitment
    • Distinction Between Recruitment and Selection
    • Steps in Employee Selection Process
    • Training
    • Importance of Training
    • Types of Training
    • Preparation of Training Programme
    • Methods of Training
    • Advantages and Disadvantages of Recruitment
    • Methods of Selection
    • Types of Selection Tests
    • Performance Appraisal
  • Industrial Relations, Trade Unions and Social Security
    • Meaning of Industrial Relations
    • Objectives of Industrial Relations
    • Causes of Poor Industrial Relations
    • Methods to Improve Industrial Relations
    • Meaning of Industrial Disputes
    • Meaning of Trade Unions
    • Objectives of Trade Unions
    • Functions of Trade Unions
    • Problems of Trade Unions in India
    • Measures for Strengthening Trade Unions
    • Concept of Social Security
    • Scope of Social Security
    • Social Security in India
  • Logistics and Insurance
    • Logistics
    • Classification of Logistics
    • Need for Transportation
    • Significance of Transportation
    • Modes of Transport
    • Choice of a Suitable Mode of Transportation
    • Warehousing
    • Importance of Warehousing
    • Functions of Warehouses
    • Warehousing
    • Warehousing Documents
    • Insurance
    • Importance of Insurance
    • Insurance
    • Types of Insurance
  • Banking
    • Banking
    • Types of Bank
    • Functions of a Central Bank
    • Control of Credit by Reserve Bank of India
    • Role of Banks in Economic Development
    • Advantages of Opening a Bank Account
    • Electronic Banking (E-Banking) - ATM, Credit and Debit Cards
    • Financial Fraudulent Practices
  • Striving for a Better Environment
    • Community Participation and Public Awareness
    • Use of Efficient and Eco-friendly Technology
    • Sustainable Use of Resources
    • Environmental Values and Ethics
    • The Environment Protection Act, 1986
    • Functions of Central Pollution Control Board
  • Definition: Asset
  • Types of Assets
  • Definition: Liability
  • Types of Liabilities
  • Definition: Net Worth
  • Formula: Net Worth
  • Real-Life Examples
Maharashtra State Board: Class 11

Definition: Asset

Anything valuable the business owns or controls, measured in money. 

Maharashtra State Board: Class 11

Types of Assets

Type

Description

Fixed/Non-Current

Used for many years in business

Current

Can be easily converted into cash within a year

Fictitious

Not real assets; expenses counted as assets

Maharashtra State Board: Class 11

Definition: Liability

Money the business still needs to pay. 

Maharashtra State Board: Class 11

Types of Liabilities

Type

Description

Fixed

Long-term, paid over several years

Current

Short-term, payable within a year

Contingent Liability

Might happen in the future

Maharashtra State Board: Class 11

Definition : Net Worth

The amount left with the business owner after paying all liabilities.

Maharashtra State Board: Class 11

Formula: Net Worth

Owner’s Equity (Capital) = Assets – Liabilities 

Includes: Owner’s investment (cash or kind) + profits kept in the business. 

Maharashtra State Board: Class 11

Real-Life Examples

Concept

Real-Life Examples (In case of a school)

Fixed Asset

A computer used in the computer lab, lasting years.

Current Asset

Cash kept in the school canteen to make daily purchases.

Fictitious Asset

Advance payment made to caterers for the school annual day, shown as an "asset" till the event happens (because benefit is yet to be received from the payment)

Fixed Liability

A long-term loan taken to build a new library.

Current Liability

Amounts payable to stationery suppliers for books delivered last month, to be paid soon.

Net Worth / Owner’s Equity

Imagine at the end of the school year, the school looks at everything it owns (buildings, grounds, equipment, bank balance) and lists out everything it still needs to pay (loans, unpaid bills). When you take away what it owes from what it owns, the score you get is the school’s net worth.

Contingent Liability

If someone files a claim against the school for an accident and the court’s decision is pending. If in the future the court decides that the school is guilty, the school must pay the person who filed the claim

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