Question

A business entity has assets of $Rs.28,000$ and liabilities of $Rs.8,000$. Owner's equity in this case is _______________.

• A. $Rs.32,000$Rs.32,000
• B. $Rs.26,000$
• C. $RS.20,000$
• D. $Rs.6,000$

Answer 1

Answer: (C)

$RS.20,000$

Accounting Equation is defined as:

Owner's Equity + Total Liabilities = Total Assets

Therefore,

Owner's Equity = Total Assets - Total Liabilities

Owner's Equity = Rs.28000 - Rs.8000

Owner's Equity = Rs.20000