Assets minus liabilities equal what measure?

Assets minus liabilities equal what measure?

• A. Net Worth
• B. Income
• C. Enterprise
• D. Capital

Answer: (A)

Assets minus liabilities equals net worth. This shows the residual value of what a person or business actually owns after all debts are paid. Put simply, add up the things of value you own (cash, equipment, inventory, accounts receivable) and subtract what you owe (loans, payables, mortgages). The result is your net worth, the financial position at a given moment. Income is money earned over a period, capital is funds invested or the resources available, and enterprise is a business venture—these don’t represent the remaining value after debts, so they aren’t the correct measure here.

Assets minus liabilities equals net worth. This shows the residual value of what a person or business actually owns after all debts are paid. Put simply, add up the things of value you own (cash, equipment, inventory, accounts receivable) and subtract what you owe (loans, payables, mortgages). The result is your net worth, the financial position at a given moment. Income is money earned over a period, capital is funds invested or the resources available, and enterprise is a business venture—these don’t represent the remaining value after debts, so they aren’t the correct measure here.