Where does equity come from?

If equity is the difference b/w assets and liabilities, and assets equal liabilities, where does the equity come from? What is equity? Thanks!!!!!

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It's still the difference between assets and liabilities. In the case where assets exactly equal liabilities, equity = $0.

As you put it "the difference b/w assets and liabilities".
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In simplest terms, it comes from 2 sources: 1) you contribute it, 2) from being profitable.
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it is "whats left over" (if anything....)...
San Diego CPA wrote:

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~^ beancounter ~^ wrote:

OK, what's my equity here:
Cash Dr Cr Net ---------------------------------------------------- Start 0.00 Loan 2500.00 2500.00 CDS 25.00 2525.00 Payment 300.00 2225.00
Accts. Payable Dr Cr Net ----------------------------------------------------- Start 0.00 CDS 25.00 25.00
Accts. Recievable Dr Cr Net --------------------------------------------------------- Start 0 Payment 300.00 300.00
Assets Dr Cr Net ----------------------------------------------------------- Start 0.00 Loan 2500.00 2500.00
Interest Accrual Dr Cr Net ---------------------------------------------------------------------------- Start 0.00 Interest 500.00 500.00
Income Dr Cr Net ---------------------------------------------------------- Start 0.00 Interest 500.00 500.00
General Ledger Dr Cr --------------------------------------------------------- Cash 2225.00 Accts. Payable 25.00 Accts. Recievable 300.00 Assets 2500.00 Interest Accrual 500.00 Income 500.00 I'm not sure what my liabilities are.
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DarkProtoman wrote:

While your Trial balance does balance, which is what you describe as a general ledger, Accounts receivable usually have a debit balance, Accounts payable usually have a credit balance. Are you loaning money, as a loan as an asset does not make sense otherwise. See http://en.wikipedia.org/wiki/Double-entry_accounting_system for more information on accounts.
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nilsson wrote:

Yeah, I'm loaning money.
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DarkProtoman wrote:

On a balance sheet, assets usually do not equal liabilities. Rather, assets equal liabilities + equity. The values that are placed in each category for any given entity is based upon really what one is looking to accomplish. If one is looking to do GAAP accounting, for example, then you could in some cases get drastically different values for assets and liabilities vs the values you would get using som e other method. For example, for people in finance, what matters really is the market value of your assets and the market value of your liabilities. Really, though, what matters to value the company is way more broad than that and involves looking into the future of the company. ... present value of future flows of assets ...present value of future outflows from liabilities...
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DarkProtoman wrote:

On a balance sheet, assets usually do not equal liabilities. Rather, assets equal liabilities + equity. The values that are placed in each category for any given entity is based upon really what one is looking to accomplish. If one is looking to do GAAP accounting, for example, then you could in some cases get drastically different values for assets and liabilities vs the values you would get using som e other method. For example, for people in finance, what matters really is the market value of your assets and the market value of your liabilities. Really, though, what matters to value the company is way more broad than that and involves looking into the future of the company. ... present value of future flows of assets ...present value of future outflows from liabilities...
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snipped-for-privacy@hotmail.com wrote:

DON'T DOUBLE POST!!!!!
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