why is capital fund in npo is liability although the entity does not have to repay it ?
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Quick Summary
In non-profit organisations (NPOs), the capital fund is treated as a liability because it represents funds introduced by members or promoters, not generated by the NPO's own operations. Accounting principles define capital as assets minus liabilities, and this introduced capital is owed to the members, hence its classification as a liability, even though it doesn't require repayment in the traditional sense.