Owner's equity

• Owner's Capital

  Increased by: Investment or contributions by the owner, Income or profit earned by the business. Decreased by: Withdrawals or distribution to the owner, Expense or loss incurred by the business
• Types of Income


  • Service Income/Service Fees, Sales, Interest Income, Gains
• Service Income/Service Fees

  • Accounting services, laundry services
• Owner's Capital

  Residual amount after deducting liabilities from assets
• Sales


  • Sale of building materials by a construction firm
• Income


  Increases in economic benefits during the period in the form of increases in assets, or decreases in liabilities that result in increases in equity
• Owner's Drawings or Withdrawals

  Account used to record the temporary withdrawals of the owner during the period
• Owner's Capital

  • Cash or other assets that the owner may withdraw from the business ultimately reduce it
• Interest Income is revenues earned from the issuance of interest-bearing receivables
• Equity or Owner's Equity


  Asset minus liabilities
• Gains are income earned from the sale of assets
• Owner's Capital

  Account used to record the original and additional investments of the owner of the business entity. It is increased by the amount of net income earned during the year or is decreased by a net loss