What is Owner’s Equity or Simply Equity
Here we will study about What is Owner’s Equity (OE) or Equity in Accounting. Owner’s Equity is the right of owner or owners invested in the business. In case of Sole Proprietorship and Partnership Businesses, the term Owner’s Equity or Capital is used. while in case of Company, the term Equity is used. The Natural or Normal or Favourable Balance for owner’s equity account or equity account is Credit and negative or Unfavourable Balance is Debit. When Owner’s Equity account increases, we Credit it and when it decreases, we Debit it. OE is Calculated From Accounting Equation or Basic Accounting Equation or Fundamental Accounting Equation . The Accounting Equation Formula is show below: Assets = Liabilities + Equity From the above formula, we can get: Equity = Assets - Liabilities You may also be interested in “ How To Calculate Stockholders Equity ” Example, Mr. A is the Sole Proprietor who invested ...