What is the owner's equity created by the business operations?

Question

Quizplus · Accepted Answer

Owner's equity is created through Retained Earnings, which are the profits that are kept within the business after all expenses, taxes, and dividends have been paid. This represents the cumulative total of earnings that have been reinvested back into the business over time. Log-on earnings and transactional earnings are not relevant terms in accounting, and sale earnings may also involve expenses and taxes that reduce the amount of profit that contributes to owner's equity.

What Is the Owner's Equity Created by the Business Operations