Final answer:
The Balance Sheet answers the question 'What is the equity (capital) in the business?' by providing a snapshot of a company's financial position and showing the value of the company's ownership or capital.
Step-by-step explanation:
The financial statement that answers the question, 'What is the equity (capital) in the business?' is the Balance Sheet.
The Balance Sheet provides a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity. The equity section of the Balance Sheet represents the value of the company's ownership or capital. It includes the initial investment by the owners, any additional investment, and retained earnings.