In the context of balance sheets, which of the following is a difference between liabilities and owners' equity?
A) Liabilities refer to the claims internal stakeholders have against the external stakeholders, whereas owners' equity refers to claims external stakeholders have against the internal stakeholders.
B) Liabilities indicate the claims outsiders have against the firm's assets, whereas owners' equity refers to the claims the owners have against their firm's assets.
C) Owners' equity indicates the claims internal stakeholders have against the firm's assets, whereas liabilities refer to the claims external stakeholders have against the firm's assets.
D) Owners' equity indicates the claims outsiders have against the firm's assets, whereas liabilities refer to the claims the owners have against their firm's assets.

Question

Quizplus · Accepted Answer

Liabilities are obligations to external parties, while owners' equity represents the residual interest of the owners in the firm's assets after liabilities are deducted.

In the Context of Balance Sheets, Which of the Following