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Sagot :
It is true that- When a company borrows from a bank by signing a formal agreement, an asset titled cash is increased, and a liability titled notes payable is increased.
Asset- The economic value of an item owned by the business is referred to as Assets. In other words, assets are items that can be converted into cash or generate income for the business quickly. It is useful for paying any business entity expenses or debts. There are two types of assets: tangible and intangible. Tangible assets, such as vehicles, are physical objects that can be touched. Intangible assets are resources that do not have a physical presence but still have monetary value. Copyright and brand recognition are two examples.
Liability- Liability refers to the economic value of an obligation or debt owed by the enterprise to another establishment or individual. To put it another way, liabilities are obligations that arise from previous transactions and are payable by the enterprise through the assets it owns. Current liabilities and long-term liabilities are the two types of liabilities. Credit lines, loans, salaries, and accounts payable are examples of current liabilities that must be repaid within a year. Many business expenses are considered current liabilities.
Learn more about asset and liabilities here:
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