If the assets of a medical practice total $20,000 and liabilities total $5,000, what is the net worth?

To determine the net worth of a medical practice, you use the accounting equation: Net Worth = Assets - Liabilities. In this case, the practice has total assets of $20,000 and total liabilities of $5,000.

When you subtract the liabilities from the assets, you get:

Net Worth = $20,000 (assets) - $5,000 (liabilities) Net Worth = $15,000

This calculation shows that the net worth of the medical practice, which represents the equity owned by the practice after all liabilities are paid off, is indeed $15,000. This value clearly represents the financial health of the practice, indicating how much would be left after debts are settled.

The other values do not accurately reflect the correct calculation based on the data provided. The correct answer encapsulates not just a simple arithmetic operation but also an essential understanding of financial principles in a medical setting.