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Capital is asset of the company. But why does it appear in
Liability side of the balance sheet.
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Answer Posted / ma10kumar
Balance Sheet is prepared from the company's stand point.
From the company's perspective, the capital provider is a
different person and therefore whatever money that (s)he is
investing in business (called Capital) should be returned
back to him/her. As it is a obligation to the company to
repay the amount, Capital comes under the Liability side.
- Ma10kumar, Chennai.
| Is This Answer Correct ? | 83 Yes | 0 No |
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