Final answer:
The economic resources to which the owner has a claim are represented by equity, and this statement is true. Equity is the owner's residual interest after liabilities are deducted, and it demonstrates the portion of assets owned outright by the owner. In the context of a home purchase, equity represents the value of the home minus any outstanding loans.
Step-by-step explanation:
The statement that the economic resources to which the owner has a claim are represented by equity is true. In accounting, equity refers to the owner's residual interest in the assets of the entity after deducting liabilities. It represents the value that would be returned to a company’s shareholders if all of the assets were liquidated and all the company's debts were paid off.
Considering a practical example regarding housing and other tangible assets, when a homeowner purchases a property, their equity in the property is the portion of the home's value that they actually own. If a house is worth $250,000 and the outstanding mortgage loan is $100,000, then the homeowner's equity is $150,000. This is calculated by subtracting the loan amount from the market value of the house.
Moreover, a T-account in bookkeeping is a visual structure that resembles the letter 'T' and is used to depict the ledger accounts of a business. The T-account separates a firm's assets from its liabilities. Assets represent the resources controlled by a firm due to past events and from which future economic benefits are expected to flow to the firm; they are on the left side. Liabilities, plus the owner's equity (also called net worth), which the firm owes to others, are on the right side. In a bank's T-account, assets will always equal liabilities plus net worth. Therefore, equity is indeed a claim on economic resources.