Which of the following best defines net worth?a) The total income you earn in a year b) The total value of your assets minus your liabilities c) The amount of money in your checking account d) The value of your investments
Question
Which of the following best defines net worth?a) The total income you earn in a year b) The total value of your assets minus your liabilities c) The amount of money in your checking account d) The value of your investments
Solution
The best definition of net worth is b) The total value of your assets minus your liabilities.
Here's why:
Net worth is a measure of your financial health. It's the value of what you own (assets) minus what you owe (liabilities).
Assets can include things like your home, car, investments, and cash in your bank accounts. Liabilities, on the other hand, are what you owe to others, such as a mortgage, car loan, or credit card debt.
So, if you add up the value of all your assets and then subtract all your liabilities, you get your net worth. This number can give you a good idea of your current financial situation.
The other options (a, c, and d) are parts of your financial picture, but they don't give a complete view of your net worth.
Similar Questions
The income statement showsMultiple Choiceincome only.the net worth of the business.the amount of long-term debt that a company has.the value of the company’s assets.profit or loss over a given period of time.
Which of the following is equal to net investment?Multiple choice question.Gross investment minus depreciationDepreciation plus GDPGDP minus final salesGross investment minus final sales
Net income is:Athe total amount of money you earnBthe amount of money you receive after deductions are subtracted from your gross incomeCthe amount of money that is taken away in the form of taxesDthe hourly rate of pay
Subtracting the debt you owe from the value of your assets provides which measure of wealth?A.Negative worthB.Net worthC.Complete worthD.Gross worthSUBMITarrow_backPREVIOUS
The total value of a person's or entity's assets minus any debts describes:Group of answer choicesincome.savings.wealth.real estate.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.