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Capital Account on the Asset Side

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(Querist)
17 October 2007 Can the capital come on the Assets side in case of a Sole Proprietorship Business?
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
18 October 2007 In the balance sheet of the Sole Proprietorship business, capital contributed to it by the proprietor can not come under the Asset side of the business as per accounting convention, for that is not the asset of that business but capital received from the proprietor.

In the balance sheet of the proprietor, the capital contributed by him to that business can be shown as asset.

S.Srinivasaraghavan
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CMA Gul S

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CMA Gul S (Expert)
18 October 2007 A Negative Capital can be a part of the Asset Side but that means that you are withdrawing Excess from your business and there are no Profits in the business.

But this is Against the Conventions
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Ravikumar.G

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Ravikumar.G (Expert)
18 October 2007 It will reflect more drawings rather than introduction of capital. It will not be healthy for the entity for good liquidity.
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kumar arumugam

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kumar arumugam (Expert)
31 October 2007 if capital comes on asset side, it is overdrawings by the proprietor from the business, which is not good to the business.
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KAAPIL

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KAAPIL (Expert)
08 November 2007 Capital Account on Assets Side reflects overdrawnings by Proprietor.
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