Net Worth is best described as the difference between total assets and total liabilities.

• A. The difference between total assets and total liabilities
• B. Total revenues minus expenses
• C. The value of inventory plus cash
• D. The market value of equity

Answer: (A)

Net worth is the value that remains after all debts are subtracted from what a person or business owns. In accounting terms, it’s assets minus liabilities, which is also shown on a balance sheet as owners’ equity. This difference captures the true residual value that belongs to the owners.

That makes the statement the best description because it matches the formal definition: the total assets minus total liabilities.

Other ideas don’t fit as neatly: revenue minus expenses measures profit over a period, not the overall value after debts. Inventory plus cash is simply a subset of assets, not the net value after obligations. The market value of equity reflects current pricing by investors and can diverge from the book value of net worth, which is based on recorded assets and liabilities.