Liabilities can be calculated by
A) adding assets to net worth.
B) subtracting net worth from assets.
C) adding assets to income.
D) subtracting expenses from assets.

Question

Quizplus · Accepted Answer

Liabilities are calculated by subtracting net worth (or equity) from assets. This is based on the accounting equation: Assets = Liabilities + Equity. Rearranging this equation to solve for liabilities gives us Liabilities = Assets - Equity (or net worth).

Liabilities Can Be Calculated by