Accounting 101: How To Interpret Your Networth?

How To Interpret Your Networth?

One of the important things to remember in Accounting 101 is that we know how to read or interpret what the numbers are telling us.

Typically, it is a G-O-O-D sign when…

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Our Networth are bigger than our Liabilities.

It spells D-A-N-G-E-R when…

Our Liabilities are bigger than our Networth.

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Accounting 101: What Is A Networth?

What Is A Networth?

Capital, in accounting is referred to as “Networth.” It is what is left when we deduct the Liabilities from our Assets.

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In Accounting, the formula of a Balance Sheet is this:

Assets = Liabilities + Capital (or Networth)

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Accounting 101: What Is A Capital?

What Is A Capital?

Capital, in accounting is referred to as “Networth.” It is what is left when we deduct the Liabilities from our Assets.

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Accounting 101: What Is A Liability?

What Is A Liability?

In layman’s term, LIABILITIES are those putting away the money or value from your container, basket or pocket.

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Accounting 101: What Is An Asset?

What Is An Asset?

In layman’s term, ASSETS are those putting money or value in your container, basket or pocket.

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