As of December 31, 2010, the assets listed on the balance sheet of Bank A were $1.5 million in cash reserves and $6 million in outstanding loans to its customers.Its liabilities totaled $6.5 million in checking deposits.What was the bank's net worth on that date?
A)$1 million
B)$4.5 million
C)$5 million
D)$14 million
E)Zero

Question

Quizplus · Accepted Answer

Net worth is calculated as assets minus liabilities. Here, assets ($1.5 million in cash + $6 million in loans) total $7.5 million, and liabilities (checking deposits) are $6.5 million. Thus, the net worth is $7.5 million - $6.5 million = $1 million.

As of December 31, 2010, the Assets Listed on the Balance