How does Assets = Liabilities + Owner's Equity?

Question

if liabilities is money owed to another company, and equity is how much a company owns outright. How does money owned to me + money owned out = Assets?

Answer 1

You have solved the problem yourself.

Owner's equity = Assets - Liabilities
In other words, owner's equity is the portion that is owned by you after deducting your liabilities

Therefore, assets = liabilities + owner's equity

Answer 2

Assets Liabilities Owners Equity

Answer 3

Assets Liabilities Equity

Answer 4

Let's say you need assets worth $10,000. You put in owner's equity of $7,000 cuz that's all you can afford. So you need to borrow $3,000, and you do. So now you owe someone $3,000, i.e. you have a liability of $3,000. So doesn't Assets = Liabilities + Owner's Equity?

Answer 5

I'll give this a try:

lets say you start a business with 10.000.
dr. cash 10,000.
cr. owner's equity 10,000.
your assets are 10,000. = liability's 0 + owners equity 10,000.
lets buy 1,000. supplies for cash
dr. supplies 1,000.
cr cash 1,000. assets
are cash 9.000 supplies 1,000. = lia. 0 + OE 10,000.
the equation is still in balance:
assets = liabilities + owners equity
now suppose we buy 500. office equipment on account:
dr. office equipment 500.
cr accounts payable 500.
***. are cash 9,000. supp. 1,000. off. Equip. 500. = liabilities 500. + OE 10,000.
The equation is still in balance:
assets 10,500. = liabilities 500. + owners equity 10,000.
10,500. in debits = 10,500. in credits
assets carry a normal dr. balance
accounts payable a normal cr. balance
owners equity carries a normal cr. balance

another way to present this would be;
assets - liabilities = owners equity
which would be:
assets 10,500 - liabilities 500. = owners equity 10,000.
assets 10,000. = owners equity 10,000.
EXCEPT:
this way you don't see the liabilities listed

I hope this is not to confusing
Good Luck

ps. where the *** show it should say assets