Capital A/c
This query is : Resolved
A D - Loving Life
(Querist)
05 June 2009
Why is capital written on liability side of balance sheet?
is it our liability ?
Specific ans with reasons
is it our liability ?
Specific ans with reasons
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.
Manmohan ACA, CS
(Expert)
06 June 2009
agree
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