This term describes the ownership claim on a company's assets after debts are settled.

This term describes the ownership claim on a company's assets after debts are settled.

• A. Assets
• B. Liability
• C. Shareholders' Equity
• D. Revenue

Answer: (C)

The ownership claim on a company’s assets after debts are settled is shareholders’ equity, the residual interest of the owners. On a balance sheet, assets must equal liabilities plus equity, so once liabilities (debts) are accounted for, the remaining assets belong to the shareholders. Equity comes from contributed capital and retained earnings, representing what the owners actually own in the company. Assets describe the resources themselves, liabilities are what the company owes, and revenue is income from operations, so only shareholders’ equity captures the owners’ claim after obligations are met.

The ownership claim on a company’s assets after debts are settled is shareholders’ equity, the residual interest of the owners. On a balance sheet, assets must equal liabilities plus equity, so once liabilities (debts) are accounted for, the remaining assets belong to the shareholders. Equity comes from contributed capital and retained earnings, representing what the owners actually own in the company. Assets describe the resources themselves, liabilities are what the company owes, and revenue is income from operations, so only shareholders’ equity captures the owners’ claim after obligations are met.