Dante listed his assets and liabilities on a personal balance sheet. Which statement is true about the value of Dante's assets and liabilities?

• A. He has $50,000 more in assets than liabilities.
• B. Assets and liabilities are equal.
• C. Liabilities exceed assets by $50,000.
• D. He has $50,000 more in liabilities than assets.

Answer: (A)

On a personal balance sheet, net worth is what remains after you subtract liabilities from assets: Net Worth = Assets − Liabilities. If Dante has assets that are $50,000 more than his liabilities, his net worth is +$50,000. That means assets exceed liabilities by 50k, which is exactly what the statement describes. The balance-sheet equation assets = liabilities plus net worth confirms this: rearranged, net worth = assets minus liabilities. If the difference were zero, net worth would be zero; if liabilities exceeded assets, net worth would be negative.