why capital is a liability ?
Answers were Sorted based on User's Feedback
Answer / libin kulamuttom
it is an amount invested by the propraitor to start a busines.As per accounting entity concept the owner and the firm has seperate entity.so it shold be treated as a loan given by him.Hence in companies point of view,it has the liability to repay the amount in future.so capital is a liability.
| Is This Answer Correct ? | 93 Yes | 4 No |
Answer / supriya dasari
According to Companies Act, 1956:-
Company is a separate legal entity and it has its own assets
& liabilities in its nature.So Owner is different from the
company. Both are different personalities in the eyes of the
law.
So, from the above Act, The capital is borrowed from the
owner in to the company. So company is liable to repay that
capital and interest on capital based on agreement(if it is
partnership firm) or prospectus of the company.
| Is This Answer Correct ? | 29 Yes | 7 No |
Answer / binoy
Capital is a contibution by the shareholders. So the
company owes the shareholders. Hence, it is shown as an
liability
| Is This Answer Correct ? | 12 Yes | 8 No |
Answer / adish jain
becoz a man brings his money to start a business. this money
treated as a loan that why it is shown in liability side in
accounting.
cash a/c dr. to capital a/c cr.
| Is This Answer Correct ? | 10 Yes | 7 No |
Answer / sahil yadav
Capital refers to amount invested by the proprietor in the business.It may be in the form of cash or Asset having amoneta value.It is a liability of business entity to its owner.It is a liability of business eno its owner.It is also termed as Internalliability,Owner'sequity,proprietor'fund,Networth.
It increase with further investment made in the business and the amount of profit earned.It decrease when it is withdrawn(drawings) or loss in the business.
Capital=TotalAsset-ExternalLiability.
| Is This Answer Correct ? | 3 Yes | 3 No |
Should purchase of Hard Disk and DVD be capitalised?
one customer visit the showroom of phones and purchased the phone of Rs 750 and gave the 1000 rupees note the showroom executive didn't have the change so he take the change from next to his showroom's shop then he deliver the phone to customer with the change of rs 250.and customer went with both after sometime the shop owner of next to showroom who gave the change of Rs 1000 with angry and told the showroom executive that the note you give it to me is fake! so showroom executive gave him Rs1000 to him.so my(question) is how much the showroom executive faced the loss on this transaction.
In the income statement we may get profit or loss but the name of the statement was Profit and Loss account Why it was so?
1 Answers Satyaki Educational Academy,
what is cost unit n what is cost sheet?
rate of vat on gold purchase local & o.m.s. & rate of % in sale local & o.m.s.
what is professional tax slab rate ?
i want to know that which head post the bill of energy audit payment in tally.
while we are paying salary what wil be the entry for tds deduction
how many tds payable if i win 15000 only 5000 or whole amt
what is bill receible
plz tell me Agar koi co. ka exp. generate ho or uski payment cash se ki jaye to hume wo exp. book krne ke liye payment ki receipt leni jaruri hai bina receipt ke entry krna sahi h ya galat..??
how to account the purchase and sale of fixed assets?