"It’s" vs.. "Its"

From my experience, quite a few people have trouble with this concept.  Some people find it difficult to decide which word to use in their writing, so I’ll give a simple explanation.

“It’s” is probably what makes it most difficult.  Sometimes, apostrophes indicate possession.  With “it’s”, however, this isn’t the case.  “It’s” refers to “it is”, instead indicating a contraction.

Example:  It is easy to understand.

Becomes:  It’s easy to understand.

“Its”, on the other hand, does indicate possession.  It is used like “his”, “hers”, “theirs”, etc.

Example:  The dog lost its bone.

With this sentence, “its” refers back to the dog.  It answers the question of whom the bone belongs to.