What would happen to your net worth if you sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000?
A)Since your liabilities decreased,your net worth would increase by $1,000.
B)Since your assets decreased,your net worth would decrease by $1,000.
C)Your net worth would increase by $500.
D)Your net worth would remain the same.

Question

Quizplus · Accepted Answer

Selling a tangible asset for $1,000 decreases your assets by $1,000, but using that money to pay off a $1,000 credit card balance decreases your liabilities by the same amount. The net effect on your net worth is zero, as both assets and liabilities decrease by the same amount.

What Would Happen to Your Net Worth If You Sold