Accounting Question

[David Gilbert]

On Saturday 26 January 2002 05:10, Michael T. Garrison Stuber wrote:
> Okay, while we're on the subject of the finer points of double column
> accounting, could someone please explain to me what (for personal finances)
> the point of an equity account is?  I know it is used for establishing
> opening balances, but I fail to understand why it gets subtracted out (I
> think) on some of the reports.  Help.  Most everything else (income,
> expense, liabilities, and assets) makes perfect sense to me, but when I
> start wrestling with this one, it makes my brain hurt.  What does it mean
> to me that I have this big negative value in my equity account?  It's not
> like I owe the money to a share holder -- it's my money.  

It's a bit contrived, but if you think of your life as a business (Me 
Incorporated) and yourself as the sole shareholder, then Me Incorporated does 
owe that money to you.  

Regards,

Dave Gilbert