The net worth of a business is the

Q: The net worth of a business is the

The net worth of a business is the asset bank loan capital ✓ debenture Explanation The net worth of a business is its capital (also called owner's equity or shareholders' equity). Net worth represents what the business is truly worth after accounting for all its debts. Net worth is calculated as: Total Assets - Total Liabilities = Capital/Net Worth. If a business owns assets worth ₦500,000 but owes ₦300,000 in liabilities, its net worth is ₦200,000. Capital includes the original investment made by owners plus accumulated profits minus any losses and withdrawals. It grows when the business makes profits and shrinks when there are losses or when owners withdraw money. Assets are resources owned by the business, not the net worth itself. Bank loans and debentures are liabilities (debts owed by the business). These are subtracted from assets to arrive at net worth.

Question

Answer 1

The net worth of a business is the

asset
bank loan
capital ✓
debenture

Explanation

The net worth of a business is its capital (also called owner’s equity or shareholders’ equity). Net worth represents what the business is truly worth after accounting for all its debts.

Net worth is calculated as: Total Assets – Total Liabilities = Capital/Net Worth. If a business owns assets worth ₦500,000 but owes ₦300,000 in liabilities, its net worth is ₦200,000.

Capital includes the original investment made by owners plus accumulated profits minus any losses and withdrawals. It grows when the business makes profits and shrinks when there are losses or when owners withdraw money.

Assets are resources owned by the business, not the net worth itself. Bank loans and debentures are liabilities (debts owed by the business). These are subtracted from assets to arrive at net worth.