Multiple Choice Review for test

$1\mathrm{.}3$ The Accounting Equation

What is the difference between owner's equity and owner's drawings?

Owner's equity represents the difference between expenses and liabilities, whereas owner's drawings represent the difference between revenue and expenses.

Owner's equity represents the difference between investments and liabilities, whereas owner's drawings represent the difference between revenue and assets.

Owner's equity is the total amount of money brought into the company by sales and revenue, whereas the owner's drawings represent the money taken out of the company by the owner.

Owner's equity is the total claim of the owner on assets of the company, whereas owner's drawings represent the cash the owner takes out of the company for personal use.