Han/hennes vs sin
I notice that when indication possession han/hennes are sometimes used, while at other times sin is used. When do we say phrases like "hunden hennes" as opposed to "hunden sin"? Which is more appropriate for saying "I like her dog": "Jeg liker hunden hennes." or "Jeg liker hunden sin."?
Are we suggesting that we use hennes if the object is 'owned' by someone else?