What Are Liabilities?

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What would be an example of a liability?

What Are Liabilities?

Don't confuse assets with liabilities. An asset is something that can make you money ... a liability is something that can cause you to loose money. But, when something that might be considered an asset in one case is a liability in another, people get confused. For example, if you are still making payments on your company car, computer or desk ... it is a liability. If you don't make the payments, you'll looses that "asset" without making money. So, if you find you are confusing your assets and liabilities, make yourself more aware of this and change your perspective. You could be saving yourself some trouble later by being very clear on what is making you money.



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Carma Spence-Pothitt