Although accounting is not for everyone there are basic concepts that absolutely everyone should know whether we are entrepreneurs employees or simply want to keep better control of our finances this is the case of the concepts of assets liabilities and capital that give you watch the video to understand these concepts in a simple way assets liabilities and capital are the main elements that make up the balance sheet which is one of the most important financial statements of companies let's start with the concept of assets assets are the total resources available to a company to carry out its operations that is to say all the goods investments and rights that are owned by the company assets in turn are divided mainly into current assets fixed assets and deferred assets current assets are all goods and rights that are transitory or convertible into money within 12 months that is to say current assets are those that have the greatest liquidity some examples of current assets are cash that is to say cash banks that is to say the money held in bank accounts merchandise among others now let's move on to fixed assets fixed assets or non-current assets are the goods that the company usually keeps these assets for more than a year are more difficult to convert into money, that is, they have little liquidity examples of fixed assets would be land buildings machinery furniture equipment and any other asset that the company keeps in the long term on the other hand the deferred asset is made up of the expenses that have been paid in advance, that is, that have already been paid for some good or service but it has not yet been used then finishing with the asset let's move on to the liabilities the liabilities represent the sum of the debts and obligations that a company has contracted this is mainly divided into current liabilities fixed liabilities and deferred liabilities current liabilities represent all debts and obligations contracted in the short term, that is, obligations that must be paid in less than a year for example suppliers creditors and notes payable fixed liabilities on the other hand includes all long-term debts that is, more than one year such as mortgage creditors and long-term loans deferred liabilities for its part are all those collections that have been made in advance on goods or services that we have not yet provided, that is, we owe the good or service once Once we understand the concepts of assets and liabilities we can move on to capital also known as equity capital is the equity of the shareholders of a company that is, the residual part of the assets once all liabilities have been deducted that is to say if you want to know the capital of a company you just have to subtract the liabilities from the assets of this this is how we arrive at the basic accounting formula which tells us that the total value of the asset is equal to the sum of the liabilities and the capital this tells us that a company is financed with third party funds that is to say liabilities and with own funds that is to say capital or equity in an upcoming video we will go into more detail about the balance sheet and how it is composed and we will see some example exercises if you liked this video don't forget to like and comment and if you want to continue learning in an easy way about economics finance and accounting don't forget to subscribe to the channel