Equity - Chart of Accounts

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.