Curious. Trying to understand what’s happening with svb, and this concept does not click yet.
In: 1
I’m an accountant, and no, cash is not a liability.
If you have a bank account, the bank owes you that money. When you make a withdrawal, you’re collecting part of the debt. So your bank account is a liability on the bank’s books. But the cash they have is not a liability; it’s an asset. They have cash on hand in case you make a withdrawal, but that doesn’t make the cash itself a liability.
I’m an accountant, and no, cash is not a liability.
If you have a bank account, the bank owes you that money. When you make a withdrawal, you’re collecting part of the debt. So your bank account is a liability on the bank’s books. But the cash they have is not a liability; it’s an asset. They have cash on hand in case you make a withdrawal, but that doesn’t make the cash itself a liability.
I’m an accountant, and no, cash is not a liability.
If you have a bank account, the bank owes you that money. When you make a withdrawal, you’re collecting part of the debt. So your bank account is a liability on the bank’s books. But the cash they have is not a liability; it’s an asset. They have cash on hand in case you make a withdrawal, but that doesn’t make the cash itself a liability.
It’s something that people with an intermediate-level knowledge of finance say.
The beginner viewpoint is that cash-in-the-vault is an asset because having cash is a positive thing.
The intermediate viewpoint is that cash-in-the-vault is a liability because it implies that the bank owes money and owing money is a liability.
The advanced viewpoint is that cash-in-the-vault is indeed an asset, owing money is a liability, and conflating the two concepts is a bad idea because it prevents you from doing proper accounting.
It’s something that people with an intermediate-level knowledge of finance say.
The beginner viewpoint is that cash-in-the-vault is an asset because having cash is a positive thing.
The intermediate viewpoint is that cash-in-the-vault is a liability because it implies that the bank owes money and owing money is a liability.
The advanced viewpoint is that cash-in-the-vault is indeed an asset, owing money is a liability, and conflating the two concepts is a bad idea because it prevents you from doing proper accounting.
It’s something that people with an intermediate-level knowledge of finance say.
The beginner viewpoint is that cash-in-the-vault is an asset because having cash is a positive thing.
The intermediate viewpoint is that cash-in-the-vault is a liability because it implies that the bank owes money and owing money is a liability.
The advanced viewpoint is that cash-in-the-vault is indeed an asset, owing money is a liability, and conflating the two concepts is a bad idea because it prevents you from doing proper accounting.
It’s neither a liability or an asset. If someone lends you $10 to be repaid tomorrow it is an asset you can spend, but a debt you owe.
Accountants have clever tricks for debts over long time periods, but to a layperson this $10 can be treated as repaid.
It’s neither a liability or an asset. If someone lends you $10 to be repaid tomorrow it is an asset you can spend, but a debt you owe.
Accountants have clever tricks for debts over long time periods, but to a layperson this $10 can be treated as repaid.
It’s neither a liability or an asset. If someone lends you $10 to be repaid tomorrow it is an asset you can spend, but a debt you owe.
Accountants have clever tricks for debts over long time periods, but to a layperson this $10 can be treated as repaid.
Because the banks don’t own the money. They have to give it back on demand. They’re effectively borrowing the money and the debt is immediately callable whenever the lender wants it back.
Latest Answers