ASSETS AND LIABILITIES

Front

What is an asset?

Back

An asset is anything of value or a resource owned by an individual or entity that can provide future economic benefits.

Front

What is a liability?

Back

A liability is a financial obligation or debt that an individual or entity owes to another party.

Front

How do you calculate net worth?

Back

Net worth is calculated by subtracting total liabilities from total assets.

Front

Give an example of an asset.

Back

Examples of assets include cash, real estate, vehicles, and investments.

Front

Give an example of a liability.

Back

Examples of liabilities include loans, credit card debt, and mortgages.

Front

What is the relationship between assets and liabilities?

Back

Assets are what you own, while liabilities are what you owe. The difference between them is your net worth.

Front

Is a savings account an asset or a liability?

Back

A savings account is considered an asset.

Front

Is a mortgage considered an asset or a liability?

Back

A mortgage is considered a liability.

Front

What is the importance of understanding assets and liabilities?

Back

Understanding assets and liabilities helps individuals manage their finances, make informed decisions, and plan for the future.

Front

What does it mean if liabilities exceed assets?

Back

If liabilities exceed assets, it means the individual or entity has a negative net worth, indicating financial instability.