Shareholders' equity is a residual interest or claim-that is, the owners (shareholders) of a firm have a claim on assets not required to meet the claims of creditors.

Question

Quizplus · Accepted Answer

Shareholders' equity represents the portion of a company's assets that belong to the shareholders after all liabilities have been paid off. It is considered a residual interest because it is what remains after satisfying the claims of creditors.

Shareholders' Equity Is a Residual Interest or Claim-That Is, the Owners