If Total assets are 450,000 and Total liabilities are 180,000, what is the net worth?

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Study for the Praxis Agriculture (5701) Exam. Prepare with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Multiple Choice

If Total assets are 450,000 and Total liabilities are 180,000, what is the net worth?

Explanation:
Net worth is the amount left after subtracting liabilities from assets. It represents owner’s equity on the balance sheet. So, with assets of 450,000 and liabilities of 180,000, net worth = 450,000 − 180,000 = 270,000. The other figures would be the total assets (450,000), the liabilities (180,000), or the sum of assets and liabilities (630,000), which isn’t net worth. The correct net worth is 270,000.

Net worth is the amount left after subtracting liabilities from assets. It represents owner’s equity on the balance sheet. So, with assets of 450,000 and liabilities of 180,000, net worth = 450,000 − 180,000 = 270,000. The other figures would be the total assets (450,000), the liabilities (180,000), or the sum of assets and liabilities (630,000), which isn’t net worth. The correct net worth is 270,000.

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