When reviewing the balance sheet for Portable Pet Care, Inc., a mobile small animal care business, Ricky noted the following information: Company assets totaling $3.5 million, and liabilities totaling $1.3 million. On paper, the net worth (owners' equity) for this business =
A) $2.2 million.
B) $4.8 million.
C) $3.5 million.
D) $0.2 million.

Question

Quizplus · Accepted Answer

As noted in the fundamental accounting equation, Assets - Liabilities = Owners' equity. On the balance sheet, owners' equity is the same as net worth.

When Reviewing the Balance Sheet for Portable Pet Care, Inc