Net worth on a company's balance sheet is properly described as:
A)the market value of the company itself.
B)the market value of the company's shares.
C)accumulated undistributed profits.
D)capital contributed by the shareholders.
E)total assets minus total liabilities, as shown on the books of the company.

Question

Quizplus · Accepted Answer

Net worth on a company's balance sheet is calculated as total assets minus total liabilities, as shown on the books of the company. It represents the company's net assets or equity, which is what remains after all debts and obligations have been paid off. It does not represent the market value of the company itself or its shares, or capital contributed by the shareholders, or accumulated undistributed profits.

Net Worth on a Company's Balance Sheet Is Properly Described