Final answer:
Tracy should ensure that her business's balance sheet is correctly ordered by listing assets on the left side of the T-account and liabilities plus net worth on the right side, ensuring that assets equal liabilities plus net worth.
Step-by-step explanation:
Tracy is reviewing her business's balance sheet and according to standard accounting principles, accounts on a balance sheet should be ordered in a specific way. The balance sheet is often presented in a T-account format. This format includes two columns, creating a T-shape, with assets listed on the left side and liabilities and net worth (or equity) on the right. In the case of a bank's T-account, assets might include reserves and U.S. Government Securities, while liabilities include deposits made by customers.
The net worth is calculated by subtracting total liabilities from total assets and is included on the liabilities side to show the balance. A positive net worth indicates a healthy business, whereas a negative net worth suggests bankruptcy. To be correct, Tracy's balance sheet must show that assets equal liabilities plus net worth.