389 | The Language of Business
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What Are Liabilities?
Jnson: It's just important to kind of understand mentally how all this stuff fits together. liabilities are bills that a company owes and has to pay, there are two main types - current liability and long term debt. shareholder's equity shows the total networth of a company is owned by the investors in that business. The critical piece here is why this is on this balance sheet is assets, as you said, equals liabilities plus equity. Jnson: And that's clearly coming off the income statement yet. But it looks wonky when you look at it first hand.
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