Final answer:
After a firm sells all its assets and pays off its bills, the remaining value is known as equity (option A), which is what would remain for the owners or shareholders.
Step-by-step explanation:
If a firm sold all of its assets and paid all of its bills, what would remain is equity. The T-account helps illustrate this concept, as it separates the assets on one side from the liabilities on the other. The net worth, or equity, of a bank or any firm is calculated as total assets minus total liabilities. This equity is included on the liabilities side to balance the T-account. Essentially, the assets of a firm are resources like cash, inventory, and property, while liabilities are what the firm owes, such as loans and debts. After selling assets and settling liabilities, the residual value that belongs to the owners or shareholders is the equity. For a healthy business, this equity will be positive, whereas it would be negative in the case of bankruptcy. In the context of a bank, deposits are considered liabilities because the bank owes this money back to its customers, whereas loans and securities are considered assets.