Why Owner Equity or Equity or Capital is Credited
Owner’s Equity or Equity or Capital is credited as t here are ge nerally accepted rules set for t his type of accou nt. Based o n t hese Rules of Debit And Credit , t he usual, favora b le, positive or normal b ala nce of equity or capital is credit b ala nce and negative, unusual and unfavorab le b ala nce is deb it b ala nce. W he n t he ow ners provide capital to t he b usi ness or make investment in b usi ness t h roug h s h ares, t he equity accou nt i n t he b usi ness increases, so credit it and w he n Drawings Account is created or profits distrib uted to shareholders i n t he form of Dividends , t he n t h e value of equity or capital account decreases in t he b ooks of b usi ness.