The original capital deposited or invested in a business is called the ______________.

• A. Revenue
• B. Asset
• C. Liability
• D. Owner's Equity

Answer: (D)

Verified step by step guidance

1. Understand the concept of Owner's Equity: In financial accounting, Owner's Equity represents the original capital deposited or invested in a business by the owner(s). It reflects the owner's claim on the assets of the business after liabilities are deducted.
2. Review the definitions of the other options: Revenue refers to income generated from business operations, Assets are resources owned by the business, and Liabilities are obligations owed to external parties.
3. Identify the relationship between Owner's Equity and the accounting equation: The accounting equation is expressed as Assets = Liabilities + Owner's Equity. This shows how Owner's Equity fits into the financial structure of a business.
4. Recognize that Owner's Equity is the correct answer: It is the term used to describe the initial investment made by the owner(s) into the business, which forms the foundation of the business's financial position.
5. Apply this understanding to similar problems: When asked about the original capital invested in a business, always consider Owner's Equity as the correct term unless specified otherwise.