Using the same Triad data, what is Triad's total net assets on its year-end balance sheet?

Using the same Triad data, what is Triad's total net assets on its year-end balance sheet?

• A. 1,400,000
• B. -250,000
• C. -950,000
• D. -1,400,000

Answer: (A)

Net assets on a balance sheet are what remains after subtracting liabilities from assets. In nonprofit accounting, total net assets represent the organization’s residual interest and can be shown as a sum of unrestricted, temporarily restricted, and permanently restricted components, but the bottom-line number is assets minus liabilities. If Triad’s year-end data show assets that exceed liabilities by 1,400,000, that difference is the total net assets. For example, any values that satisfy Net assets = Total assets − Total liabilities and yield 1,400,000 will lead to this result. Conversely, a negative figure would indicate liabilities outweigh assets, which is not the case here. Thus, the total net assets equal 1,400,000, reflecting that assets exceed liabilities by that amount.

Net assets on a balance sheet are what remains after subtracting liabilities from assets. In nonprofit accounting, total net assets represent the organization’s residual interest and can be shown as a sum of unrestricted, temporarily restricted, and permanently restricted components, but the bottom-line number is assets minus liabilities.

If Triad’s year-end data show assets that exceed liabilities by 1,400,000, that difference is the total net assets. For example, any values that satisfy Net assets = Total assets − Total liabilities and yield 1,400,000 will lead to this result. Conversely, a negative figure would indicate liabilities outweigh assets, which is not the case here.

Thus, the total net assets equal 1,400,000, reflecting that assets exceed liabilities by that amount.