Which term indicates total assets minus total liabilities?

Which term indicates total assets minus total liabilities?

• A. Income
• B. Net worth
• C. Gross profit
• D. Net sales

Answer: (B)

Net worth is the difference between what you own and what you owe. It’s total assets minus total liabilities, and it represents the residual value after all debts are paid. On a balance sheet this also aligns with owners’ equity—the amount that belongs to the owner once liabilities are settled. For example, if assets total $100,000 and liabilities total $40,000, net worth is $60,000. The other terms—income, gross profit, and net sales—relate to earnings and revenue, not the overall net position after liabilities, so they don’t indicate assets minus liabilities.

Net worth is the difference between what you own and what you owe. It’s total assets minus total liabilities, and it represents the residual value after all debts are paid. On a balance sheet this also aligns with owners’ equity—the amount that belongs to the owner once liabilities are settled. For example, if assets total $100,000 and liabilities total $40,000, net worth is $60,000. The other terms—income, gross profit, and net sales—relate to earnings and revenue, not the overall net position after liabilities, so they don’t indicate assets minus liabilities.