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hello we are going to start talking about chapter 18 in intermediate accounting youve probably heard a good bit about shareholders equity but in this chapter were really going to dig into it so you can fully understand all aspects of the balance sheet so shareholders equity is what were covering in chapter 18. so anytime we talk about external financing theres two different ways that we can get external financing we can issue debt which is where we have some kind of creditor that is lending us money and we owe it back to them or we have equity equity is any owners interest in the company so this could be a handful of owners or this could be where there are lots of stockholders in the company different companies have different setups here but our debt plus our equity is our external financing we also know that with the very basic accounting equation is assets equal liabilities plus shareholders equity and if were just trying to single out shareholders equity we can switch that equ