Assets minus liabilities = ?

**The reasoning** This is the **Accounting Equation**, the foundation of all bookkeeping. Think of it like this: - **Assets** = everything your business owns (cash, equipment, goods) - **Liabilities** = everything your business owes (loans, debts to suppliers) - **Capital** = the owner's stake in the business The formula is: **Assets = Capital + Liabilities** Rearranging: **Capital = Assets − Liabilities** So when you subtract what you owe from what you own, you're left with what truly belongs to the owner — that's the **Capital** (also called Owner's Equity or Net Worth). **Why the wrong options tempt you** - **A) Profit** – This is *income minus expenses* over a period. Different formula entirely. - **B) Loss** – Same issue; this comes from comparing revenue to expenses, not assets to liabilities. - **D) Revenue** – This is money earned from sales/services. It affects capital eventually, but it's not the direct result of Assets − Liabilities. **Quick takeaway** Assets minus Liabilities always equals Capital — it shows what the owner truly owns after settling all debts.