Net Worth

What are liabilities?

• Financial debts and obligations for which you owe money.

• Assets that you own and control.

• Investments that generate income.

• Expenses that are incurred during operations.

What are assets?

• Monetary assets you own, such as cash, property, and investments.

• Liabilities that you owe to others.

• Items that have no monetary value.

• Only physical items like furniture and vehicles.

If you have $10,000 in assets and $4,000 in liabilities, what is your net worth?

• $4,000

• $6,000

• $8,000

• $10,000

What is an example of a liquid asset?

• Cash or money in a checking account.

• Real estate property.

• Stocks and bonds.

• Collectible items.

What is the difference between gross income and net worth?

• Gross income is total earnings before deductions; net worth is the difference between total assets and total liabilities.

• Gross income is the amount after taxes; net worth is the total income earned in a year.

• Gross income is the total amount spent; net worth is the total savings accumulated.

• Gross income is the total revenue generated; net worth is the total expenses incurred.

What is the significance of net worth?

• It provides a snapshot of financial health and stability.

• It indicates the total income earned over a lifetime.

• It measures the amount of debt a person has.

• It reflects the current market trends in investments.

Which of the following is NOT an asset?

• Bank Loan

• Mortgage

• Debit Card

• Savings Account

What is a savings account considered in terms of assets?

• A liquid asset.

• A fixed asset.

• An intangible asset.

• A non-current asset.

If your assets total $50,000 and your liabilities total $30,000, what is your net worth?

• $10,000

• $15,000

• $20,000

• $25,000

What does a negative net worth indicate?

• It indicates that assets exceed liabilities.

• It indicates that liabilities exceed assets.

• It indicates a balanced financial situation.

• It indicates that there are no debts.