06 June 2009
The concept of "Capital" comes from business entity concept,wherein it is specified that the business and the businessman are two seperate entities from accounting point of view.Accordingly the amount invested by the businessman into business is considered as liabilty from the business point of view.As investment made by the businessman into business is called as "Capital",and since it is liabilty it is shown in the liability side.Therefore capital introduced will also be shown in the liability side.
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