Net worth is calculated as which of the following?

• A. Total assets minus total liabilities
• B. Total assets
• C. Total liabilities
• D. Revenue minus expenses

Answer: (A)

Net worth reflects the value remaining after you settle all obligations with everything you own. It’s found by subtracting total liabilities from total assets, giving the owner's equity or net financial position. Assets are items of value you own, like cash, investments, or property, while liabilities are what you owe, such as loans or credit card debt. Subtracting liabilities from assets captures the true picture of what you truly own outright. The other options don’t fit: total assets alone ignores debts, total liabilities alone ignores what you own, and revenue minus expenses measures net income, not net worth.