Ajay Mady In: Category - Capital or EquityWhere to find equity in accounting?equity ShareFacebook1 AnswerVotedRecent Palak 2020-08-06T16:14:31+05:30Added an answer on August 6, 2020 at 4:14 pm This answer was edited. Equity in accounting refers to the sum of money that is returned or paid to the owners/shareholders at the time of winding up of the company once all of the assets are liquidated and the liabilities are paid off. It is generally referred to as Shareholder’s equity or Owner’s equity. It can also be calculated with the help of a formula derived from the accounting equation which is as follows:EQUITY = TOTAL ASSETS – TOTAL LIABILITIES Treatment of equity in accountingEquity is shown in the balance sheet under shareholder’s equity, which is a result of the difference between the total assets and total liabilities of the company. I would like to explain this concept further with the help of an example which is as follows:ExampleThe following is the balance sheet of XYZ Ltd. which shows their Equity, Liability, and Assets during the current financial year.Balance sheet as at 31st March, yyyyPARTICULARSNOTE NO.AMOUNTEQUITY AND LIABILITIESShareholder’s FundShare capital1,00,000Reserves & Surplus40,000Non-Current LiabilitiesLong- Term Borrowings14,000Current LiabilitiesShort term borrowings3,000Trade Payables6,000Short Term provision3,000Total1,66,000ASSETSNon-Current AssetsFixed assets1,10,000Current assetsInventories20,000Trade Receivables30,000Cash and bank balance6,000Total1,66,000NOTE: As mentioned earlier, equity represents the difference between the total assets and total liabilities which can be easily recognized in the balance sheet given above.Total Assets = 1,66,000Total Liabilities = 26,000Equity = Total assets – Total liabilities= 1,66,000 – 26,000= 1,40,000 Hope this helps.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login or register to add a new answer.