What are assets, liabilities, and equity? Provide examples

Based on accounting standards, assets refers to those owned by the company. These can be categorized as current or non-current, depending on their liquidity. The normal balance of these accounts are debit. These include cash, receivables, inventories, property, plant and equipment, intangibles, among others.

On the other hand, liabilities refers to those amount owed by the company to its creditors. Just like assets, these can also be categorized as current or non-current, depending on how long these will become due. The normal balance of these accounts are debit and it includes accounts payable, other trade payable, long-term and short term loans and notes payable, among other.

Lastly, equity refers to the portion of assets that are financed by investors. This include the investments made by the owners and other investors to keep the company running. This include the capital account in case of sole proprietorship and partnership while retained earnings, common stock, paid in capital, among other, in case of a corporation. Just like the liability account, it also has a normal balance of credit.