What is the difference between assets and liabilities on a balance sheet?

On the balance sheet, the assets side represents a company’s resources with positive economic utility, while the liabilities and shareholders equity side reflects the funding sources. What are the Components of the Accounting Equation? How Does the Double Entry Accounting System Work?

What does equity mean on a balance sheet?

Below liabilities on the balance sheet, you'll find equity, the amount owed to the owners of the company. Since they own the entire company, this amount is intuitively based on the accounting equation – whatever is left over of the Assets after the liabilities have been accounted for must be owned by the owners, by equity.

What are assets & liabilities?

The assets are what allow the company to run. Liabilities and equity make up the right side of the balance sheet and cover the financial side of the company. This is a list of what the company owes. With liabilities, this is obvious – you owe loans to a bank, or repayment of bonds to holders of debt, etc.