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JAMB Commerce 2005 Question 43

Question 43

Business Finance

The excess of the assets over the liabilities of a business is called

  1. A.working capital
  2. B.net worth
  3. C.capital employed
  4. D.initial capital
Show the answer and explanation

Answer: B (net worth)

Explanation

Assets minus liabilities is what the owner is worth in the business: net worth. Working capital uses only current assets and liabilities.