Liabilities are on left side and Assets on right side in Balance Sheet

Why always Liabilities are on left side and Assets on right side in Balance Sheet?

Questions by dinesh_rakwal

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steadyshot23

  • Mar 18th, 2010
 

The accounting equation is Assets= Liabilities + Stockholders Equity
As you can see the assets  are on the left and Liabilities are on the right. On the Balance sheet Assets are reported first and Liablities and Stockholders Equity after.

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Ankit Jain

  • Jul 9th, 2014
 

Liabilities side of balance sheet deals with how the funds are raised whereas the assets side of balance sheet deals with how the funds are invested. Firstly the funds are raised (by incurring liabilities) after which they are invested (asset formation). Left-to-right is a general way of reading/writing, hence the liabilities side would appear before assets.

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