On Sat, Sep 24, 2011 at 11:01, Martin Michlmayr <[email protected]> wrote: > > > Yes. Assets are the actual things you have (a house, shares, etc). > Equity is what actually belongs to you. Just because you have a $200k > house (assets) doesn't mean you owe it - you might also have a $200k > loan (i.e. liabilites). This is much different to a $200k house > (assets) without a loan (liabilities) and therefore $200k in equity. > > During the year, you wouldn't use the Equity account. You'd use > Income and Expenses instead. But when you close the book at the end > of the year, assuming your Income is higher that your Expenses, then > your Equity would grow (i.e. at the end of the year, your set all > Expenses and Income to 0 and increase/decrease Equity accordingly.) > > BTW, I recommend this quick guide on book keeping: > http://www.dwmbeancounter.com/tutorial/Tutorial.html > > -- > Martin Michlmayr > http://www.cyrius.com/ >
Thanks for the explanation and the link. -- Craig, Corona De Tucson, AZ enderw88.wordpress.com
