What represents the owner's claims to the assets of a business?

The owner's claims to the assets of a business are represented by equity. Equity is the residual interest in the assets of the entity after deducting liabilities. It reflects the ownership stake that the owners have in the business, encompassing investments made by the owners as well as retained earnings that have been reinvested in the business.

When business assets are measured, equity shows how much of those assets are owned outright by the owners, as opposed to being financed through debts or obligations to creditors. Essentially, equity provides insight into the financial health of the business from the owner's perspective.

In contrast, assets refer to what the business owns, liabilities indicate what the business owes to others, and revenue represents the income generated from business operations. While these elements are interconnected, only equity directly highlights the owner’s claim on the company's assets.