Owner's equity is:
A) the amount taken out of a business by the owner for personal use.
B) the financial interest of the owner of a business.
C) the amount the owner owes the business.
D) the revenues less the expenses.

Question

Quizplus · Accepted Answer

Owner's equity is the financial interest of the owner of a business. It is the residual interest in the assets of the business after deducting liabilities. It represents the owner's investment in the business, as well as any profits or losses that have accumulated over time. A is incorrect as that would be a withdrawal. C is incorrect since it is the other way around - the business owes the owner money. D is incorrect because it is the net income, not the owner's equity.

Owner's Equity Is