Question

If total assets of a business are Rs. 1,80,000 and total outside liabilities are Rs. 50,000, the net worth of the firm will be ___________.

• A. Rs. $1,30,000$
• B. Rs. $2,30,000$
• C. Rs. $1,80,000$
• D. Rs. $50,000$

Answer 1

Answer: (A)

Rs. $1,30,000$

Accounting Equation:

Owners Equity+Outside liabilities=Total Assets

Owners Equity=Net Worth

Owners Equity/Net Worth+Rs.50000=Rs.180000

Hence Net Worth of the firm will be Rs.130000