If Liabilities are $22,000 and Assets are $42,000, Owner's Equity will be $20,000.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the ownership interest of shareholders or partners.

Liabilities

Financial obligations or debts owed by a business to outsiders, such as loans, accounts payable, or mortgages.

Familiarize yourself with the essential elements of the basic accounting equation and its uses.

Verified Answer

Final Answer :

True

Explanation :

Owner's Equity is calculated as Assets minus Liabilities, so $42,000 - $22,000 = $20,000.

Learning Objectives

Familiarize yourself with the essential elements of the basic accounting equation and its uses.