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Blog thoughts

Equity - Chart of Accounts

9/17/2015

2 Comments

 
Everyone wants equity in a company.  Equity is what the shareholders or owners in a business are owed after all liabilities are paid.  A simple example is your company sells $1,000 worth of items and you paid $600 for the items.  The remaining $400 would eventually end up in the equity account.  The legal structure of the business will determine which equity accounts are used.  These may include owner's capital, owner's draw for a sole proprietorship or capital stock, common stock, and preferred stock for a corporation.
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2 Comments
Ethan Sprier
9/17/2015 10:07:41 pm

I always wondered how the equity section fit in. Thanks.

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Doug Hales
9/17/2015 10:14:15 pm

Glad it helped.

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