Which Of The Following Statements Is The Correct Definition Of Owner's Equity?

The correct choice of this multiple choice question is C, as Owner’s Equity shows the rights of owner of the business (Sole Proprietorship & Partnership) against the Assets of the business. It is proved with the help of Accounting Equation as shown below: Assets = Liabilities + Owner’s Equity Owner’s Equity = Assets - Liabilities We get Owner’s equity after deducting all the liabilities (claims / rights of outsiders against assets) from assets. A sole owner / proprietor is the person who invested into the business by assets such cash, equipment, property, goods, etc., to start the business to earn profits from profitable activities. Such initial investment ( Capital ) gives the business, assets in the form of cash or goods against which the proprietor has rights to claim from the business known as owner’s equity. The journal entry to record is to debit a cash, equipment and purchases account / inventory account (if cash, equipment and goods are invested) and...