Equity Accounts Tutorial Home >Software >Finance >QuickBooks 2000 >Designing a Chart of Accounts >Equity Accounts Tutorial Home >Software >Office >QuickBooks 2000 >Designing a Chart of Accounts >Equity Accounts   Step 1:  What is Equity? An equity account represents the value of your company. Capital stock can be an equity account - the stock account represents the amount of money your shareholders have invested in your company. Retained Earnings is another equity account. Retained Earnings represents the difference between your income and expenses. If your income exceeds your expenses, your Retained Earnings reflect the amount by which your income is greater than your expenses.   Step 2:  Examine Existing Equity Accounts If you chose the standard chart of accounts, or if you have already set up accounts in QuickBooks, you can see a listing of equity accounts that exist in your company. Choose Lists, and select Chart of Accounts to open the listing of your entire Chart of Accounts. Glance or scroll through the Chart of Accounts list. Look in the Type column to see the type of each account. There is only one type for Equity accounts and it is called Equity.   Step 3:  Create an Equity Account You may need to create an equity account if the accounts necessary for your business were not created when you initially set up your business. For example, there is no opportunity in the set up interview to enter capital stock. To create a new equity account, click the Account button in the Chart of Accounts window, and then click New. Choose Equity as the Type of account, and then enter the rest of the information that applies to this account.   Step 4:  Enter Opening Balance With any new equity account, you have the right to enter an opening balance for the account. This field is optional, but it is available when you set up an equity account. Keep in mind that, as with all QuickBooks transactions, the amount you enter will have to be offset to another account. In the case of an opening balance, the amount gets entered in the Opening Balance Equity account. Find out more about this account in the next set of tutorials, "Miscellaneous QuickBooks Issues."