Liabilities reduce the value of your balance sheet

All you need to know is that liabilities takes money away from you and it is something that you will owe.

Again try and look around you to see what things take money away from you.

Ask your parents to help you but a simple example would be that since you go to school – this costs money and your parents have to pay for the school fees – the amount they have to pay is a liability to them – but hopefully the school is educating you and they are getting a “return” (I will explain this later) in that you are able to write and read

Remember that if you have a liability on your balance sheet there will be a corresponding  asset on somebody else’s balance sheet- so try to have as many assets on your balance sheet.

Assets and Liabilities – what are they