Final answer:
The claim that a firm's net worth is listed on the balance sheet is true. Net worth represents the company's assets minus its liabilities and indicates its financial health.
Step-by-step explanation:
The statement that the "net worth" of a firm is shown on the company's balance sheet is true. A balance sheet is an essential accounting tool that lists a company's assets and liabilities, where assets are valuable items owned by the firm, and liabilities are the debts or obligations the firm owes. The net worth, also known as equity or shareholders' equity in a business context, represents the residual interest in the assets of a firm after deducting liabilities. It is calculated as total assets minus total liabilities.
On a balance sheet, this calculation serves as a measure of the financial health of a company. A positive net worth signifies that a company has more assets than liabilities, indicating financial stability. Conversely, a negative net worth signals that liabilities exceed assets, which may denote financial distress.