The resources that a business possesses and is in control of are its assets. They can be physical, like furniture, supplies, and real estate, or intangible, like patents, trademarks, and copyrights. The two categories of assets are current and non-current. In contrast to non-current assets, which cannot be turned into cash within a year, current assets can. The ability to generate revenue for a business is represented by its assets, which may also be utilized to obtain loans and other forms of finance.
A company’s liabilities are its outstanding debts to third parties. They may be long-term, like bonds and mortgages, or short-term, like accounts payable and short-term loans. Additionally, liabilities are divided into two groups: current and non-current. Non-current obligations are those that are due more than a year after the balance sheet date, whereas current liabilities are those that must be paid within a year. Because they indicate a company’s financial responsibilities and can be used to determine its capacity to pay back loans, liabilities are significant.
After obligations have been subtracted, a company’s equity is its remaining interest in its assets. It is also referred to as net assets or shareholder’s equity and symbolizes the ownership interest of the shareholders. Retained earnings and contributed capital are the two subtypes of equity. Retained earnings are the profits that the business has made and kept over time, whereas contributed capital is the sum of money that shareholders have deposited in the business. Because it reflects a company’s value to its owners and can be used to gauge its profitability, equity is significant. Are Amazon Sellers Required to Have Insurance?
Although insurance is not needed for Amazon sellers, it is strongly advised. Risks associated with selling on Amazon include those related to product responsibility, intellectual property infringement, and cyberattacks. Sellers can feel secure and be protected from these hazards with the use of insurance. Product liability insurance, general liability insurance, and cyber liability insurance are a few insurance options that Amazon sellers may wish to think about.
It may be advantageous for crafters to have insurance, particularly if they sell their goods online or at craft shows. Crafters might be subject to concerns including product liability and intellectual property infringement, much as Amazon merchants. Crafters may also want to think about purchasing insurance that covers their tools and materials as well as any potential employees or volunteers. General liability insurance, product liability insurance, and property insurance are a few insurance options that craftsmen might want to think about.
In conclusion, it’s critical to comprehend the three main categories on a balance sheet when evaluating a company’s financial situation. Although insurance is not necessary for Amazon sellers or craftsmen, it is strongly advised to protect against any risks and liabilities. Sellers and craftspeople may build their enterprises with the confidence that comes with having the appropriate insurance coverage.