As a residual interest,equity ranks after liabilities in terms of a claim against the assets of a reporting entity.

Question

Quizplus · Accepted Answer

Residual interest, also known as equity or shareholders' equity, represents the ownership interest in a reporting entity's assets after deducting liabilities. As such, equity ranks after liabilities in terms of a claim against the assets of the entity. Therefore, the statement is true.

As a Residual Interest,equity Ranks After Liabilities in Terms of a Claim