Assets are those resources controlled by the entity in which those are to bring the entity benefits

in the future. These may either have physical substance or not. Those assets that have physical
substance are those assets that are tangible like cash, inventory, supplies, etc. Those assets that
have no physical substance are those assets which are intangible like goodwill, trademark, etc.
assets can also be identified as either current or noncurrent. When the asset is said to be current,
this just means that it is readily available for use by the entity or its lifespan is for only a year.
Noncurrent assets are those assets that are to be used by the entity for a long period of time.
Liabilities on the other hand are those debt the entity has incur either in their normal operating
cycle or not. These may be classified as either current liability, which are to be paid within 12
months after the end of the reporting period, and noncurrent liabilities, which is the residual
definition of the liability. Liabilities can either be used as to finance the entity itself or to finance
the need when acquiring assets to be used in the business. Equity on the other hand is where all
the investments of the owner is set aside, this section also shows how much earnings an entity
may achieve in a year or two and even how much withdrawals the owner did all throughout the
year. These 3 are interrelated as they are the one that compose the accounting equation. The
accounting equation can be illustrated as assets is equals to liabilities plus equity. This just means
that these 3 are all important to an entity. The asset is related to the liability and vice versa as the
asset is sometimes the reason on why the entity incurs liabilities. Like when the entity are of low
cash to buy the equipment they need, the entity borrows fund to by the specific equipment. The
equity is related to asset in a sense that upon starting up the business, the capital that would be
included in the owner is the asset they have invested. All these 3 plays important role in the
accounting that the absence of one might lead to downfall. Its interrelatedness is very visible just
by merely looking and remembering the accounting equation.
Asset
Cash. Cash is the very basic item included in asset. It is the asset that is always readily available
to an entity when either paying debt, paying expenses, for the withdrawal of the owner, etc.

Liabilities
Accounts payable. Accounts payable is one example of trade and other payables. This normally
arises upon the normal operating cycle of an entity. The entity borrows money to a creditor and
then used it to buy assets until there comes the return

Equity
Capital. The capital is the very basic example of equity. This is where the investment of the
owner is credited.