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.

Front

What are liabilities?

Back

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

Front

What is net worth?

Back

Net worth is the difference between total assets and total liabilities, representing the value of an individual or entity.

Front

If Charlie's net worth is -$35,354, what does this indicate?

Back

It indicates that Charlie has more liabilities than assets, resulting in a negative net worth.

Front

How do you calculate net worth?

Back

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

Front

What does a positive net worth signify?

Back

A positive net worth signifies that an individual's assets exceed their liabilities.

Front

What does a negative net worth signify?

Back

A negative net worth signifies that an individual's liabilities exceed their assets.

Front

What is the formula for calculating net worth?

Back

Net Worth = Total Assets - Total Liabilities.

Front

Give an example of an asset.

Back

Examples of assets include cash, real estate, stocks, and personal property.

Front

Give an example of a liability.

Back

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