Owner's equity refers to the financial interest of the owner in a business, which includes the initial investment as well as any retained earnings or profits. It is not the amount taken out of the business for personal use (A), nor is it simply revenues less expenses (D).

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Owner's Equity Is

Question 74

Multiple Choice

Owner's equity is

A) the amount taken out of a business by the owner for personal use.
B) the financial interest of the owner of a business.
C) the amount the owner invested in the business.
D) the revenues less the expenses.

Correct Answer: