Asset, liability, equity

Accountancy

Assest is resource which have capable to generate future economic benefit to entity Libality is a obligation Then what is euqity means... (With practical example...)

Madhu Reddy

CA Inter

★ 4K+

11-Mar-23 13:04

607

Answers (4)

Assets = Liabilities + Capital (Equity) So, bringing Liabilities to LHS, we get, Assets - Liabilities = Capital (Equity)

Varshaa M

CA Final

★ 35K+

11-Mar-23 14:12

Equity is excess of assets over liabilities.

Varshaa M

CA Final

★ 35K+

11-Mar-23 14:12

Company is artificial person, if u remove the screen u will see shareholders who are going to invest in the company. shareholders are owners for understanding but for company they are creditors since the company gives return as divend. The main difference between equity and other liablities, whenever liquidation happens the equity shareholder's money is liable towards other liabilities when it is required. And oftenly we say NETWORTH of company which is also equity and that much of the company's worth for equity shareholders.

Kamal Kumar

CA Inter

★ 7K+

11-Mar-23 17:40

Whatever is left with the entity after settling liabilities is equity.

CA Suraj Lakhotia

Admin

12-Mar-23 16:28