The owners' equity of a business is equal to:

Question

Quizplus · Accepted Answer

Owners' equity is the residual interest of the owners in the assets of the business after liabilities are deducted. This means that owners' equity is equal to assets minus liabilities, as stated in option B. Option A is incorrect because revenues minus expenses give net income or net loss, which is not equal to owners' equity. Option C is incorrect because assets plus liabilities give total assets, which is not equal to owners' equity. Option D is incorrect because paid-in capital plus assets do not give the complete picture of owners' equity, as it also includes retained earnings.

The Owners' Equity of a Business Is Equal To