Net Worth Answers

The following table shows the assets and liabilities of the Chang family in 2007 and 2008.20072008home valued at $315,000home valued at $325,000mortgage of $265,000mortgage of $240,000car valued at $10,000car valued at $6,000car loan of $5,000car loan of $1,000savings of $2,000credit card debt of $1,500Based on the table, which of the following is true?a.From 2007 to 2008, both assets and liabilities decreased.b.From 2007 to 2008, both assets and liabilities increased.c.From 2007 to 2008, assets decreased and liabilities increased.d.From 2007 to 2008, assets increased and liabilities decreased.

In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings. Which of the following is a true statement?a.The Johnsons increased their liabilities.b.The Johnsons increased their liquid assets.c.The Johnsons increased their net worth.d.The Johnsons increased their use assets.

Which of the following is an example of increasing both current liability and use assets?a.paying off car loan and investing money in retirement fundb.paying down mortgage and putting money in savingsc.selling a motorcycle to pay off a debtd.trading in an old car for a newer car and financing the balance

The car owned by a person is part of his or her ____.a.investment assetsb.liquid assetsc.long term assetsd.use assets

Which of the following modifications to the list of assets and liabilities below would result in a positive net worth?Home owned $105,000.Mortgage owed $100,000.Car valued at $26,000.Car loan of $22,000.Investment fund of $4,500.Savings of $1,500.Credit card balance of $15,000.a.Lowering mortgage by $1,000.b.Increasing investment fund by $500.c.Adding $100 to savings.d.All of the above.

Which of the following is a liability?a.bonus paycheckb.credit card balancec.investment fundd.savings account

What does a negative net worth indicate?a.Your assets exceed your liabilities.b.Your assets equal your liabilities.c.Your liabilities exceed your assets.d.You have only assets and no liabilities.

Over the period of a year, Julie’s net worth decreased. Which of the following could be true?a.Julie’s assets and liabilities decreased by the same amount.b.Julie’s assets and liabilities increased by the same amount.c.Julie’s assets increased by more than her liabilities.d.Julie’s assets decreased by more than her liabilities.

What is the difference between assets and liquid assets?a.All assets represent money, but only liquid assets can be easily turned into spendable money and used to pay debts.b.An asset represents a credit or a positive value, while a liquid asset represents a debit or a negative value.c.Assets are money gained from your job, while liquid assets are money gained from sources such as investments or inheritances.d.An asset is owned by you alone, while a liquid asset is shared among several people, such as a married couple or a group of investors.

Which of the following modifications to the list of assets and liabilities below would result in a net worth of $100,000?Recreational Vehicle valued at $110,000.Car valued at $27,000.Medical bills totaling $8,700.Loan balance of $80,000.Savings of $5,000.Retirement fund of $50,000.Credit card balance of $2,300.a.recreational vehicle value decreasing to $100,000b.borrowing $10,000 more in loansc.withdrawing $20,000 from the retirement fundd.adding $1,000 in credit card debt