T_account - T ACCOUNTS A Taccount or Balance sheet lists the assets(anything of value that an economic agent has and its liabilities(anything which

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T – ACCOUNTS A T-account or Balance sheet lists the assets (anything of value) that  an economic agent has and its liabilities (anything which is owed) +  net worth.  The two sides always balance because liabilities include  NET WORTH which is defined as ASSETS – LIABILITIES. It is common that one economic agent’s assets are another economic  agent’s liabilities. So for example: If Joe Blow writes an IOU to Sally Smith, it is a liability for Joe and an  asset for Sally. If you think about what a balance sheet would look like for a typical  household it would be something like: Assets Liabilities Cash on hand Mortgage Money in bank accounts Credit Card Debt Bonds Bank Loan Stocks House Net Worth Car Personal Possessions
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For a typical student, the net worth may of course be negative if your  debts are greater than your assets. In the financial markets that we are dealing with, we can look at the 
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This note was uploaded on 02/11/2010 for the course ART AFM101 taught by Professor Mr.lushman during the Spring '10 term at University of Toronto- Toronto.

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T_account - T ACCOUNTS A Taccount or Balance sheet lists the assets(anything of value that an economic agent has and its liabilities(anything which

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