The term net worth is a preferred over the term owner's equity because assets are recorded at original cost rather than at current value.

Question

Quizplus · Accepted Answer

The term "owner's equity" is more specific to the owner's interest in the business, while "net worth" can refer to the overall financial position of an individual or entity. The preference for either term is not directly related to how assets are recorded.

The Term Net Worth Is a Preferred Over the Term