capital is an amount invested by the proprietor, according to separate entity concept owner is different from the company so, capital is treated as liability.
As capital is a contibution by company owner towards business and capital is a liability of a business and due to which it has credit balance, that's why any contribution towards capital will be treated as liability of business and it will be credited to capital to increase capital
Capital stock is part of liability
Capital is the amount contributed by company's owners toward company that's why it is a liability of company to payback on occasion of dissolution that;s why it is treated as owner's equity and comes under liability side of balance sheet and not as an asset of company.
1. Capital introduced in business is liability of business towards it's owner to payback, so if owner's introduce more capital it increases the liability of business that's why it is also liability.
Owner's is treated as liability to the company/business. this is because ,the owner contribute or say loan the fund to the business to start its opperation and hence produce what to sale/trade and then generate income out of it
Share is treated as liability. It is not treated as asset. shares is called as share capital. capital is entered in the liabilities side of the balance sheet.
As capital is a contibution by company owner towards business and capital is a liability of a business and due to which it has credit balance, that's why any contribution towards capital will be treated as liability of business and it will be credited to capital to increase capital
Capital stock is part of liability
Capital is the amount contributed by company's owners toward company that's why it is a liability of company to payback on occasion of dissolution that;s why it is treated as owner's equity and comes under liability side of balance sheet and not as an asset of company.
This is capital employed which is not Equity. It is a liability and attracts a fixed interest with a capital repayment made at the end of the life of the liability
1. Capital introduced in business is liability of business towards it's owner to payback, so if owner's introduce more capital it increases the liability of business that's why it is also liability.
Owner's is treated as liability to the company/business. this is because ,the owner contribute or say loan the fund to the business to start its opperation and hence produce what to sale/trade and then generate income out of it
Hi, Dividends are paid out of retained earnings (part of Capital) therefore I think Dividends can not be treated as an expense (the prudence being increase in Capital can not be treated as Revenue thats Cash generation while dividends are Surplus appropriation). regards, Zeeshan
Should be treated as an liability
Yes owners capital is liability for businss towards its owners to be return back at the even of liquidation of business.
Capital account is liability nature of account because any capital introduce by owner towards business is the liability of business to return to it's owner.
Long term