Liabilities are defined as a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of the entity’s resources. Owner’s equity is the total assets of an entity, minus its total liabilities. This represents the capital theoretically available for distribution to shareholders. Assets, on the other hand,  are economic resources a business owns
and assets will provide future services or benefits. Both I and II are TRUE about owner’s equity.