- CFA Exams
- CFA Exam: Level I 2021
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 22. Understanding Balance Sheets
- Subject 1. Components and Format of the Balance Sheet
CFA Practice Question
On the balance sheet, the amount that is "net assets" is equivalent to the amount shown as "owners' equity." True or False?
Correct Answer: True
Remember the accounting equation: assets minus liabilities equals owners' equity. "Net assets" and "owners' equity" on any given balance sheet are equal amounts.
User Contributed Comments 9
| User | Comment |
|---|---|
| chenyx | net asset=owner's equity |
| wroger | Net asset = Total assets - Total Liability |
| drets | A=L+E |
| mirfanrana | net assets equals owner equity net assets equals TA minus TL |
| 3dmouse | Assets = Liab + OE -Liab -Liab ------------------ A - L = OE Net Asset = A - L therefore Net Asset = OE |
| georgek | why doesn't net assets mean assets net of any contra asset accounts? |
| Shaan23 | Net Assets = OE = Shareholders E = Net Worth = Net Book Value = Partners Value = A - L Just know the terms |
| gclafort | thanks @shaan23 |
| F79KHAN | Confused by this a little bit, I felt that net assets should also describe asset amounts after removing contra accounts. But I suppose net assets could also be interpreted as net of liabilities thereby describing owners equity. |