Assets are money that you have, and Liabilities are money that you
owe.  ``Liabilities'' is just a more inclusive name for Debts.

An Asset is typically increased by transferring money from an Income
account, such as when you get paid.  Here is a typical transaction:

@smallexample
2004/09/29  My Employer
    Assets:Checking               $500.00
    Income:Salary
@end smallexample

Money, here, comes from an Income account belonging to ``My
Employer'', and is transferred to your checking account.  The money is
now yours, which makes it an Asset.

Liabilities track money owed to others.  This can happen when you
borrow money to buy something, or if you owe someone money.  Here is
an example of increasing a MasterCard liability by spending money with
it:

@smallexample
2004/09/30  Restaurant
    Expenses:Dining                $25.00
    Liabilities:MasterCard
@end smallexample

The Dining account balance now shows $25 spent on Dining, and a
corresponding $25 owed on the MasterCard---and therefore shown as
$-25.00.  The MasterCard liability shows up as negative because it
offsets the value of your assets.

The combined total of your Assets and Liabilities is your net worth.
So to see your current net worth, use this command:

@example
ledger balance ^assets ^liabilities
@end example

Relatedly, your Income accounts show up negative, because they
transfer money @emph{from} an account in order to increase your
assets.  Your Expenses show up positive because that is where the
money went to.  The combined total of Income and Expenses is your cash
flow.  A positive cash flow means you are spending more than you make,
since income is always a negative figure.  To see your current cash
flow, use this command:

@example
ledger balance ^income ^expenses
@end example

Another common question to ask of your expenses is: How much do I
spend each month on X?  Ledger provides a simple way of displaying
monthly totals for any account.  Here is an example that summarizes
your monthly automobile expenses:

@example
ledger -M register expenses:auto
@end example

This assumes, of course, that you use account names like
@samp{Expenses:Auto:Gas} and @samp{Expenses:Auto:Repair}.