Final answer:
Net worth is calculated by subtracting total liabilities from total assets in a T-account, reflecting a firm's financial health and is a fundamental concept in business and accounting.
Step-by-step explanation:
The question pertains to analyzing a financial assets and liabilities record to determine a person's net worth, which is a key concept in business and accounting. The 'T' in a T-account represents a simplified ledger to record a bank or firm's assets on the left side and its liabilities on the right side. The net worth, also known as bank capital, is calculated by subtracting total liabilities from total assets and is reflected on the liabilities side of the balance sheet to make the T account balance. This reflects that in accounting practices, all assets will always equal liabilities plus net worth. If assets exceed liabilities, the entity has positive net worth, which signifies a healthy financial state. Conversely, when liabilities exceed assets, the net worth is negative, indicating potential insolvency or bankruptcy. Real-life business applications typically involve more complex assessments, but the basic principles are foundational to understanding financial statements.