Dani has prepared her personal balance sheet and found that her total assets are $54,000 and her total liabilities (largely college loans) are $48,000. What does this show for Dani?
A) Her net income is only $6,000.
B) Her net worth is $6,000.
C) Her cash flow will not be sufficient to repay her college loans.
D) Her balance sheet is out of balance.

Question

Quizplus · Accepted Answer

A balance sheet is based on the fundamental accounting equation: Assets = Liabilities + Owners' equity (or net worth). Thus, to find her net worth, Lucy can subtract her debts from her assets.

Dani Has Prepared Her Personal Balance Sheet and Found That