Basic Accounting Terminology

1. Asset:: In a business Assets denote Accounts( Personal or Real) which are capable of providing future benefits. So a Machinery will be a asset as it will give benefit or value to the business in future.

2. Liability: Liabilities are opposite of assets and denotes those accounts (Personal or Real) which will derive benefit from business or will cause the business to give up value. So a Creditor is a liability as business will be required to pay to the creditor in future.