Owners' equity represents the residual interest in the assets of the entity after deducting liabilities, essentially what owners would have left if the company's assets were sold and all its debts paid off.

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Owners' Equity Is

Question 40

Multiple Choice

Owners' equity is

A) the profits earned by and reinvested in the company.
B) the amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities.
C) the amount of money originally invested in a business by its owners.
D) a debt owed by a firm to an outside organization or individual.
E) any economic resource expected to benefit a firm or an individual who owns it.

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