An equity account is a ledger account used to record the owners’ residual claim on the business after liabilities are deducted from assets. Equity accounts sit in the equity section of the balance sheet and help explain how ownership value is structured and changed over time.
Examples include contributed capital, retained earnings, treasury stock adjustments, and partner or proprietor capital balances.
Owners’ equity is the broader residual-interest concept. An equity account is one specific ledger account inside that broader ownership section.
For example, a company may have multiple equity accounts:
Together they form total owners’ or shareholders’ equity.