PRC-1 · Chapter 1 · Question 93 of 100
Under the conceptual framework for financial reporting, what is the exact definition of 'Equity'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The residual interest in the assets of the entity after deducting all its liabilities.
Explanation
Equity is formally defined as the residual interest in the assets of the entity after deducting all its liabilities (Assets - Liabilities = Equity).
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