Which financial statement would you consult to find the owner's equity of a company?

Which financial statement would you consult to find the owner's equity of a company?

• A. Income statement
• B. Balance sheet
• C. Cash flow statement
• D. Statement of changes in equity

Answer: (B)

Owner's equity is shown on the balance sheet, which provides a snapshot of the company's financial position at a specific date. The balance sheet lists assets, liabilities, and owners' equity, with the equity figure representing the residual interest after liabilities (essentially assets minus liabilities). This balance includes contributed capital, retained earnings, and other equity components. The income statement covers performance over a period (revenues and expenses), the cash flow statement tracks cash movements, and the statement of changes in equity shows how equity components changed over time. For the exact owner’s equity amount, the balance sheet is the place to look.