Ask the Accountant: What Is Equity, And How Is It Different from Assets?

By Harriet Gatter

Ask the Accountant…

Question: What is equity in my business and how is that different from assets?

Answer: In accounting, equity is assets minus liabilities. Equity is the portion of your business that is yours after debts or liabilities are considered.

As an example, if you purchased a house for $300,000 and took a mortgage of $200,000, you have equity of $100,000.

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Harriet Gatter Author's page

Harriet Gatter is an independent accounting and order management consultant serving only ad specialty distributors. Her specialty is QuickBooks Desktop and QuickBooks Online: getting started; migrating from QB Desktop to Online; converting from other order management; and accounting systems, including manual spreadsheets, restarting QuickBooks files that have gone rogue, and training distributors to use their new system. (She was also a distributor for 23 years.)