What is an example of equity?
submitted by jun

ig88

Owner's equity is basically the value of a company. Total up all the assets, subtract all the liabilities, and there's your equity.

Rammalamma

Equity is how much interest the owners have leftover after you subtract liabilities. It's what the owners really own after bills are paid. Here are some examples:

Owner’s Capital: This is the cash invested by the owners into the business. It can be listed on the balance sheet as owner’s capital or "contributed capital."

Retained Earnings: Profits that the company has kept. Over time, these accumulate and increase the overall equity.

Additional Paid-In Capital: If shares are issued above their par value, the excess amount is recorded here.

Treasury Stock: If the company buys back its own shares.

Accumulated Other Comprehensive Income: There are certain gains or losses that aren't included in net income, like foreign currency that changed value.

Basically, any account that reflects the owners’ claim after all debts are paid is considered equity. It's the company's net worth.