Assets vs Liabilities

Front

What are assets?

Back

Assets are resources owned by an individual or entity that have economic value and can provide future benefits.

Front

What are liabilities?

Back

Liabilities are obligations or debts that an individual or entity owes to others.

Front

How do you calculate net worth?

Back

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

Front

If JJ Watt's assets are $99,000,000 and his liabilities are $33,000,000, what is his net worth?

Back

$66,000,000

Front

Is a car loan an asset or a liability?

Back

A car loan is a liability.

Front

Is a dirt bike an asset or a liability?

Back

A dirt bike is an asset.

Front

What is an example of a liability?

Back

An example of a liability is a cell phone bill.

Front

What is an example of an asset?

Back

An example of an asset is a savings account.

Front

What does it mean if net worth is negative?

Back

A negative net worth means that liabilities exceed assets.

Front

What is the relationship between assets and liabilities?

Back

Assets and liabilities are used to assess financial health; assets provide value while liabilities represent debts.