How do Bitcoin balances work when an address is controlled by multiple parties together? user1, pubkey1, 1.1 BTC
user2, pubkey2, 1.2 BTC
user3, pubkey3, 1.3 BTC
user4, pubkey4, 1.4 BTC

user4 sends 0.4 BTC to a 2-of-3 multi-sig account controlled by user1, user2 and user3 using P2SH.
The transaction is successful.
What is the account balance for user1, user2 and user3?
Bitcoin balances conceptually are not like bank account balances, but more akin to banknotes: uniquely identifiable, good for a specific amount, and can only be spent in full. The &quot;account balance&quot; shown by your wallet is simply the sum of funds that the wallet knows how to spend. In the case of your multisig example, if user1, user2, and user3 each have their own wallet but each wallet keeps tracks of the multisig unspent transaction output (utxo) as its own, they would each see it as part of their balance.
Basically, it's up to the users to decide how to interpret the spendability of their shared funds. The network would enforce that they would only be able to spend the UTXO once in total, though. Alternatively, it's possible that they share one &quot;watch-only&quot; wallet to track the balance, but each hold their own separate key. In that case this shared watch-only wallet would track the balance only once, but they'd each hold their own key independently.
So, concretely, the users' balances after the transaction from user4 would be:
user1, pubkey1, 1.1 BTC
user2, pubkey2, 1.2 BTC
user3, pubkey3, 1.3 BTC
user4, pubkey4, 1.0 BTC
{user1,user2,user3}, 2-of-{pk1,pk2,pk3}, 0.4 BTC

Where the last UTXO is controlled by the multi-party address as described and has different spending properties than the individual balances of the the users.