Accounting Dictionary - Letter E
(also called net worth or net assets) is what an entity "owes" to owners. Equity can be called shareholders' equity in a corporation or owner's equity in a sole proprietorship. Equity is the difference between assets and liabilities: Equity = Assets - Liabilities. Equity accounts may include contributed capital (paid-in capital) and retained earnings. Equity accounts normally have credit balances.
Don't see the term you are looking for? Try searching our entire website:
Not a member?
See why people join our
online accounting course:
online accounting course:
