When Your Assets Exceed Your Liabilities, You

question 50

Multiple Choice

When your assets exceed your liabilities, you:

• A) are losing equity.
• B) have a negative net worth.
• C) are solvent.
• D) are bankrupt.
• E) have more real assets than investments.

---

Definitions:

Net Income

The net income of a business following the deduction of all costs, taxes, and expenses from its total earnings.

Gross Profit Rate

The gross profit rate is a financial metric indicating the percentage of revenue that exceeds the cost of goods sold, showcasing the efficiency of a company in managing its production costs.

Merchandise Inventory

Goods a company intends to sell in the normal course of business, tracked in an account for accounting and management purposes.

Estimated Cost

An approximation of the financial expenses associated with a project, product, or service before it is fully realized.