What remains for the owners after liabilities are deducted from assets is known as?

The term that describes what remains for the owners after liabilities are deducted from assets is known as equity. In accounting, equity represents the ownership interest in a company, which can be thought of as the residual interest in the assets of the entity after deducting liabilities. This concept is fundamental in understanding a company’s financial position, as equity indicates the portion of the company owned by its shareholders.

Equity can also include retained earnings, which are the profits that a company has reinvested in itself rather than distributed to shareholders. Understanding equity is crucial for owners and investors because it reflects the net worth of the company and serves as an indicator of its financial health.

The other terms provided in the options do not accurately describe the residual claim of ownership after liabilities are settled. Assets represent the total resources owned by a company, liabilities are the obligations or debts owed, and revenues refer to the income generated from normal business operations. None of these terms encapsulate the idea of ownership interest that is the focus of equity.