Which of the following is NOT a liability?

Which of the following is NOT a liability?

• A. mortgage
• B. credit card
• C. car loan
• D. house

Answer: (D)

Understanding what counts as a liability versus an asset. A liability is a debt or obligation you owe that requires future payments. An asset is something you own that has value and can contribute to your net worth. The mortgage, the balance on a credit card, and a car loan are all debts you must repay, so they are liabilities. The house, on the other hand, is something you own that holds value and can be sold or used, which makes it an asset. Even if you have a mortgage tied to the house, the loan itself is the liability while the house remains an asset (its equity is asset value minus the mortgage). So the item that is not a liability is the house.

Understanding what counts as a liability versus an asset. A liability is a debt or obligation you owe that requires future payments. An asset is something you own that has value and can contribute to your net worth. The mortgage, the balance on a credit card, and a car loan are all debts you must repay, so they are liabilities. The house, on the other hand, is something you own that holds value and can be sold or used, which makes it an asset. Even if you have a mortgage tied to the house, the loan itself is the liability while the house remains an asset (its equity is asset value minus the mortgage). So the item that is not a liability is the house.