Question

Which of the following best describes owner’s equity?

Answer 1

Best describes owner's equity:
B. The owner's interest or worth in the business.

Owner's equity is equal to the business assets less the business liabilities.

Equity = Assets - Liabilities

In the balance sheet, owner's equity is the term used if the business is a sole proprietorship. If the business is a corporation, the equity portion of the balance sheet states Stockholder's Equity (common stock, preferred stock, paid-in capital in excess of par value, paid-in capital from treasury stock, retained earnings, etc)