Final answer:
An asset is something of value owned by a firm or individual that can be used to produce something, listed on the balance sheet along with liabilities. Subtracting liabilities from assets gives the net worth, representing bank capital in the context of banking.
Step-by-step explanation:
The definition of an asset is an item of value that a firm or an individual owns. It is something owned and can be used to produce something, such as cash to pay tuition or a home. In accounting, assets are listed on a balance sheet, which is a tool that also lists liabilities.
Whereas a liability is a debt or something you owe, like a mortgage on a house. The net worth of an individual or a business, such as a bank, is calculated by subtracting liabilities from assets, and this figure represents the bank capital for a banking institution.