What are assets, liabilities and capital ?

Assets

The assets are the resources possessed by the firm. These resources can be classified as non-current and current called Fixed Assets and Current Assets. The fixed assets are the assets purchased for retention by an entity and not held for resale in the normal course of trading, for example, business building, furniture and motor vehicle. The remaining assets that are not considered as fixed assets are current assets, for example, bank, debtor and inventory.

Capital

Capital is the supplies of resources by the owner of the business.

Liabilities

Liabilities are all the claims on the business by the parties other than owner of the business (outsiders). Those liabilities payable within next twelve months of the balance sheet date is called Current Liabilities, for example, trade creditors. Those liabilities payable more than next twelve months of the balance sheet date is called Long-Term Liabilities or Deferred Liabilities, for example, long-term loan.