The term owner's equity is a more accurate term than net worth because many assets are recorded at original cost rather than at current value.

Question

Quizplus · Accepted Answer

Owner's equity represents the residual interest in the assets of a company after deducting liabilities, and it includes the original cost of assets as well as any increases in value over time. "Net worth" is a term more commonly used for personal financial statements and may not accurately reflect the value of a company's assets due to the use of historical cost accounting.

The Term Owner's Equity Is a More Accurate Term Than