Assets are financed with Liabilities and stockholders' equity.
The financing of assets is explained through the use of the Accounting Equation which is:
Assets = Liabilities + Stockholders' Equity
This means that the two things that finance assets in a company are the liabilities that it has, or the stockholder's equity in the company .
Liabilities that the company has can come in different forms. There are current liabilities such as Accounts Payable and Accrued expenses. Then there are the more long term liabilities such as Loans, notes payables and debentures .
Stockholder's equity also comes in different forms. Apart from the common and preferred stock outstanding, other sources of stockholder's equity include Retained Earnings and Other income .
In conclusion, all the assets that a company has, comes either from their liabilities, or the stockholder claims on the company .
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