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

Question

Quizplus · Accepted Answer

Owner's equity refers to the financial interest which the owner or owners have in a business. It is calculated by subtracting the total liabilities of the business from its total assets. It represents the residual value of the business assets after all the liabilities have been accounted for. Hence, option D is the correct answer. Option A refers to drawings, option B refers to net income, and option C refers to accounts payable.

Owner's Equity Is