ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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).

Detailed explanation-2: -You can calculate it by deducting all liabilities from the total value of an asset: (Equity = Assets – Liabilities). In accounting, the company’s total equity value is the sum of owners equity-the value of the assets contributed by the owner(s)-and the total income that the company earns and retains.

Detailed explanation-3: -Assets = Liabilities + Shareholders’ Equity.

Detailed explanation-4: -What Are the 3 Elements of the Accounting Equation? The three elements of the accounting equation are assets, liabilities, and shareholders’ equity. The formula is straightforward: A company’s total assets are equal to its liabilities plus its shareholders’ equity.

Detailed explanation-5: -Assets = Liabilities + Shareholder’s Equity This equation sets the foundation of double-entry accounting, also known as double-entry bookkeeping, and highlights the structure of the balance sheet. Double-entry accounting is a system where every transaction affects at least two accounts.