Assets / Liabilities / Net Worth

Front

What are assets?

Back

Assets are resources owned by an individual or entity that have economic value and can provide future benefits. Examples include cash, real estate, and vehicles.

Front

What are liabilities?

Back

Liabilities are obligations or debts that an individual or entity owes to others. They represent claims against the assets. Examples include loans, mortgages, and credit card balances.

Front

What is net worth?

Back

Net worth is the difference between an individual's total assets and total liabilities. It represents the financial position of an individual or entity.

Front

Can net worth be negative?

Back

Yes, net worth can be negative if liabilities exceed assets.

Front

Which of the following is an example of an asset? A Car, Student Loans, Rent Payments?

Back

A Car is an example of an asset.

Front

Which of the following is not a liability? Stock, Credit Card Balance, Car Loan, Mortgage?

Back

Stock is not a liability.

Front

Which of the following is not an asset? Car, House Value, House Mortgage, Jewelry?

Back

House Mortgage is not an asset.

Front

How do you calculate net worth?

Back

Net worth is calculated by subtracting total liabilities from total assets: Net Worth = Total Assets - Total Liabilities.

Front

What is the role of assets in determining financial health?

Back

Assets contribute positively to financial health as they can be converted into cash or provide future income.

Front

What is the role of liabilities in determining financial health?

Back

Liabilities can negatively impact financial health as they represent debts that must be repaid.