Overview
Accounting is essential for businesses to keep track of their spending and earning. Similarly, it is important for people to perform personal accounting to make sure they manage their money effectively. Assets and liabilities create your financial health. Assets are what you own, liabilities are what you borrow or are responsible for. Balance Sheet Basics provides students with an opportunity to see realistic assets and liabilities across ages.
NB Curricular Connections
Personal Wellness
- Strand: Mental Fitness – Big Idea: Decision Making – Skill Descriptor: Discuss decision-making about money.
English Language Arts (Grades 6-8):
- Strand: Reading – Big Idea: Vocabulary – Skill Descriptor: Recognize how different strategies are used to determine the meanings of words
- Strand: Interactions – Big Idea: Expression – Skill Descriptor: Express and support ideas and opinions with evidence; Understand communication for a diverse set of audiences
What You’ll Need
- PowerPoint Presentation (included)
- Activity Cards (included)
Instructions
Use the power point presentation to define the terms: Assets, Liabilities and Net Worth
- Assets: Think of assets as things you own that have value. Imagine your collection of video games, toys, or money in your piggy bank. These are all assets because they have value, and you can use them to trade for something else. Assets are like the cool stuff you own.
- Liabilities: Liabilities are things you owe or have responsibilities for. For example, if you borrowed a video game from a friend, that’s a liability because you need to return it. If you promised to help your neighbor with their chores, that’s also a liability because it is something you are responsible for.
- Net Worth: When you add up all your assets, and take away your liabilities, you get an idea of your overall financial health or Net Worth. Your net worth provides insight to the value of your belongings, and your responsibilities.
- Have learners discuss as a class to brainstorm examples of assets and liabilities.
- Ask learners to classify the list of examples on Power point slide # 6 as an asset or a liability and explain why.
- Encourage discussion of why it is important for a business owner to understand the idea of assets and liabilities. Pose the question: “What types of assets and liabilities would a new business owner incur when setting up a business.” Have students think of local businesses for reference. For example, a Dog Groomer would have to purchase grooming tools, supplies, invest in a payment and booking system while conversely having to borrow a loan from the bank to get started.
- Game: Assets and Liabilities Card Sort. Print and cut the cards below, individually or in small groups, students sort the cards to be either an asset or a liability.
Reflection Tool
Please see the attached PDF for several choices on how you and your learners can reflect on today’s activity.
