Assets are valuable resources owned by an individual, company, or government. They can be tangible (like buildings, machinery, and cash) or intangible (like patents and trademarks). Assets are expected to provide future economic benefits.
Capital represents financial resources or assets available for use, especially in starting or maintaining a business. It can be in the form of money, property, or other assets that can generate income or value over time. There are different types of capital, such as working capital and venture capital.
Currency is the physical form of money issued by a government or central bank. It includes coins and paper notes used in a specific country or region. Each currency, such as the US Dollar or Euro, has its own value and is used for buying goods and services within its jurisdiction.
Equity represents ownership interest in an asset or a company after all liabilities have been deducted. In the context of personal finance, equity might refer to the value a homeowner has in their property. In business, equity can refer to shareholders’ stake in a company.
Expenses are the costs incurred by an individual or business in order to generate income or run daily operations. These include rent, salaries, utilities, and cost of goods sold. Managing expenses is key to maintaining profitability.
Finance refers to the management of money and other financial resources. It includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting. The field of finance is often divided into three main areas: personal finance, corporate finance, and public finance.
Income is the money an individual or business receives in exchange for providing a good, service, or through investments. It can be earned (like salaries and wages) or unearned (like dividends and interest).
An investment is the allocation of money or resources with the expectation of generating income or profit in the future. This can be done through assets such as stocks, bonds, real estate, or businesses. The goal of investing is to grow wealth over time.
Liabilities are financial obligations or debts that a person or organization owes to others. They include loans, credit card debt, mortgages, and other payable amounts. In accounting, liabilities are listed on the balance sheet and are used to calculate equity.
A loss occurs when expenses are greater than revenue in a given period. It represents a negative financial outcome and can happen in business operations or investments.
