What is the importance of owners’ equity in accounting? What will be

QUESTION

What is the importance of owners’ equity in accounting?

What will be an ideal response?

ANSWER

Answer: Owners’ equity is considered important because it is used to indicate a company’s financial strength and stability. Before making loans to a company, for example, lenders want to know the amount of owners’ equity in it.
Explanation: Owners’ equity is considered important because it is used to indicate a company’s financial strength and stability. Before making loans to a company, for example, lenders want to know the amount of owners’ equity in it.