ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Determine Your Liabilities
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Calculate Your Net worth
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Determine Your Assets
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None of the above
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Detailed explanation-1: -The first step is establishing your net worth. Your net worth is simply the difference between what you own and what you owe. This is what I call your personal balance sheet. In accounting, everything that you own is known as your assets.
Detailed explanation-2: -The first step in this process is to determine the total amount of your assets. Assets are your possessions that have value-for example, money in bank accounts, stocks and bonds, personal property, your home or other real estate. Once you’ve calculated your assets, determine the total amount of your liabilities.
Detailed explanation-3: -Assets are listed in the balance sheet in order of their liquidity, where cash is listed at the top as it’s already liquid. No conversion is required. The next on the list are marketable securities like stocks and bonds, which can be sold in the market in a few days; generally, the next day can be liquidated.
Detailed explanation-4: -The most liquid of all assets, cash, appears on the first line of the balance sheet.
Detailed explanation-5: -Add the value of all assets. List total under assets. Add the total obligations owed. List total under liabilities. Subtract the liabilities from the total assets to determine net worth. List the amount under personal equity. 14-Apr-2022