Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Net worth is calculated by subtracting liabilities from which of the following?

Expenses

Assets

Revenues

Owner's equity

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Verified step by step guidance

Step 1: Understand the concept of net worth. Net worth represents the value of an entity's assets after deducting its liabilities. It is a measure of financial health.

Step 2: Recall the formula for net worth: Net Worth = Assets - Liabilities. This formula highlights that net worth is derived by subtracting liabilities from assets.

Step 3: Analyze the options provided in the problem. Expenses, revenues, and owner's equity are not directly used in the calculation of net worth. Assets are the correct component used in the formula.

Step 4: Confirm that liabilities are subtracted from assets to determine net worth. This aligns with the fundamental accounting equation: Assets = Liabilities + Owner's Equity.

Step 5: Conclude that the correct answer is 'Assets,' as net worth is calculated by subtracting liabilities from assets.