Final answer:
Cash and other owned things are listed as assets on the balance sheet, while liabilities include debts and owed items. Net worth is calculated by subtracting liabilities from assets.
Step-by-step explanation:
A balance sheet is an accounting tool that lists assets and liabilities. Cash and other things that are owned by the individual or the business for which a financial statement is prepared are listed as assets.
Assets can include cash held in vaults, monies held at the Federal Reserve bank, loans made to customers, and bonds. Liabilities, on the other hand, are debts or things that are owed. They can include deposits made in the bank by customers.
Net worth is calculated by subtracting total liabilities from total assets. In a bank's T-account, assets always equal liabilities plus net worth.