PRC-1 · Chapter 1 · Question 18 of 100
According to the conceptual framework, 'Equity' is formally defined as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The residual interest in the assets of the entity after deducting all its liabilities.
Explanation
Equity represents the owners' residual claim on the business. It is defined as the residual interest in the assets of the entity after deducting all of its obligations or liabilities.
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