What does the term owners equity refer to?

Owner's equity represents the financial interest that an owner holds in a business. It is the residual interest in the assets of the business after all liabilities have been deducted. This means that it reflects the true value of the owner's stake in the business, encompassing initial investments, retained earnings, and any additional investments made by the owner. In essence, owner's equity is what the owner would receive if the business were liquidated, highlighting the overall financial health and sustainability of the company.

In contrast, other options discuss different facets of business finances. The total liabilities pertain to what the business owes to creditors, and revenue generated by sales refers to the income produced from selling goods or services. Customer-owned assets describe items that belong to customers rather than the business itself. None of these options capture the essence of owner's equity as a measure of ownership value in the business.