2. The balance sheet equation and assets Preparing a personal balance or statement of financial position helps get a handle on your financial well-being. A balance sheet has three parts that, when taken together, summarize your financial picture. Complete the following balance sheet equation by selecting the correct term for each piece of the formula. Net assets (Total Assets) (Total Liabilities) (Net Worth) The items you own, or your are classified regardless of whether they were purchased for cash or financed with debt. A useful way to group assets is on the basis of their underlying categories: liquid assets, investments, real property, and personal property. Choose the correct category for each asset in the following table. Municipal bond Checking account Individual retirement account (IRA) A savings account Your pontoon boat Front sidewalk Your in-ground swimming pool Your Mont Blanc pen Liquid Assets Investments Real Property Personal Property As you gather asset information, it is important to identify and record all assets. Regardless of asset category, all assets listed on the balance sheet should be recorded at You are calculating your net worth, and you have determined that your assets total $140,000, and your liabilities total $85,000. Your net worth is therefore $