BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Assets – Liabilities . Owner’s equity is best depicted as Assets-Liabilities. Therefore, the Owner’s equity is the difference between assets and liabilities. It is also known as Balance sheet equation.

Detailed explanation-2: -Because technically owner’s equity is an asset of the business owner-not the business itself. Business assets are items of value owned by the company. Owner’s equity is more like a liability to the business.

Detailed explanation-3: -Thus, the accounting equation is: Assets = Liabilities + Owner’s equity. The balance sheet is a complex display of this equation, showing that the total assets of a company are equal to the total of liabilities and owner’s equity.

Detailed explanation-4: -The definition of owner’s equity is the owner’s investment in an asset after they deduct any liabilities. It’s the difference between the number of assets and the value of liabilities that allows the owner to know what they own after paying off debts. Owner’s equity is also called net worth or net assets.

Detailed explanation-5: -Owner’s Equity is defined as the proportion of the total value of a company’s assets that can be claimed by its owners (sole proprietorship or partnership) and by its shareholders (if it is a corporation). It is calculated by deducting all liabilities from the total value of an asset (Equity = Assets – Liabilities).