Which of the following is an owner's equity account?

• A. Accounts Payable
• B. Cash
• C. Ross Morris, Capital
• D. Service Revenue

Answer: (C)

The main idea is identifying which accounts represent the owner's stake in the business. An owner's equity account tracks the owner’s claims to the business assets. The capital account, shown as Ross Morris, Capital, specifically records the owner's investment and any changes to that investment over time, making it a permanent owner’s equity account.

In contrast, Accounts Payable is a liability (what the business owes to others), Cash is an asset (resources owned by the business), and Service Revenue is a revenue account that affects net income and ultimately equity but is categorized as a revenue account rather than an owner's equity account. Revenue and expense accounts are temporary and are closed to the owner’s equity at period end.