Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities is referred to as a/an:

Question

Quizplus · Accepted Answer

A residual interest in the assets of an entity refers to equity. Therefore, any contract that evidences such residual interest would be an equity instrument. Debt instruments represent a creditor's claim on the assets of an entity and mortgages represent a specific type of debt instrument secured by a property. None of these options accurately describe a contract that evidences residual interest in the assets of an entity.

Any Contract That Evidences a Residual Interest in the Assets