Accredited Asset Management Specialist (AAMS) Practice Exam

Question: 1 / 400

How are the liabilities calculated in Bob Larkin's net worth?

By including expenses only

By summing debts owed

In calculating Bob Larkin's net worth, liabilities are determined by summing all debts owed. This includes all financial obligations such as loans, credit card balances, mortgages, and any other forms of debt. By accumulating these amounts, one can obtain a comprehensive view of the total financial liabilities that contribute to an individual's overall financial picture.

Net worth is calculated by subtracting total liabilities from total assets. Therefore, an accurate assessment of liabilities is crucial, as it establishes the baseline from which net worth can be derived. It's important to capture every type of debt to reflect the true financial status. When calculating liabilities, focusing on debts provides a full picture of what one owes, leading to a more precise calculation of net worth. This is why summing debts owed is the correct approach.

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By considering assets only

By excluding short-term debts

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