Which Statement Best Describes Net Worth

question 65

Multiple Choice

Which statement best describes net worth?

• A) Net worth increases as income increases.
• B) Net worth decreases as income increases.
• C) Net worth and income are essentially unrelated.
• D) Net worth increases as income increases but only for the very wealthy.

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Definitions:

Kitchen Equipment

Kitchen equipment includes the tools and appliances used in the preparation, cooking, and storage of food in a kitchen setting.

Accounts Payable

A liability account on the balance sheet representing money owed by a company to its creditors or suppliers for purchases made on credit.

Credit Column

The section of an accounting record where increases in liabilities, revenues, and equity accounts are recorded.

Debit Column

The Debit Column is the left-hand side of an account record in double-entry bookkeeping, used to record increases in asset, expense, and loss accounts, and decreases in liability, equity, and revenue accounts.