Detailed Explanation:

Rationale for Correct Answer:By definition, Equity (or net assets) represents the residual interest in the assets of an entity after deducting liabilities. This aligns with the basic accounting equation: Assets = Liabilities + Equity. Thus, the difference between assets and liabilities is Equity.

Analysis of Incorrect Options:

B. Expense – A cost incurred in earning revenue, not residual interest.

C. Revenue – Inflows from operations, not assets minus liabilities.

D. Income statement – A financial report, not a balance sheet component.

Key Concept:Equity as residual interest in the accounting equation.