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why share capital shown in liability side of a balance sheet
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Answer / karan
because shareholders are the real owner of the co. and the amt. which is introduced by the owner for the commencement of business is liability for the business concern.thats it is on liabity side
| Is This Answer Correct ? | 2 Yes | 1 No |
Answer / vikas papreja
because business is a different entity. even if the owner brings capital to the business... it may be asset for owner... but from business point of view it is a liability for the business because business has to gave it back to the owner of respective fund.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / taimoor akhlaqq
SHARE CAPITAL IS NOT A LIABILITY OF THE COMPANY, AS AN
ACCOUNTING RULE IT IS SHOWN ON THE CREDIT SIDE AND HAVING A
CREDIT BALANCE BUT SHOWING ON CREDIT SIDE DOES NOT MEAN
THAT IT IS LIABILTY, LIBILITIES ARE SEPERATELY SHOWN UNDER
THE LIABILITY HEADINGS BUT SHARE CAPITAL IS NOT SHOWN UNDER
THE HEADING OF LIABILITY. IT IS SHOWN ON THE CREDIT SIDE OF
THE BALANCE SHEET. LIABILITY MEAN OBLIGATION, BUT THE
COMPANIES ARE NOT LIABILE TO PAY IF THE ASSETS ARE NOT
REALIZED THE AMOUNT AS SHOWN IN THE BALANCE SHEET AT THE
TIME OF LIQUIDATION.
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / abhinav bohra
Share Capital is something which was shared by Public, and if this is amount of Public or not related to the CO. so we (Co.) are liable for this so this will come in Liability side
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / nilesh
If the Capital is undertaken by the promotors then also why it is displayed in Liability side
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / rajesh
because it is the outsiders capital, thats why we shown in
the liability side
| Is This Answer Correct ? | 8 Yes | 12 No |
Answer / vvk
simpaly sharecapital is one kind of libility of company
therefore it is shown libility side of balance sheet
| Is This Answer Correct ? | 5 Yes | 14 No |
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