Capital, Accounting Basics

Capital

In addition to borrowing from banks and additional sources, all companies obtain finance from their owners. This money is usually accessible for the life of the business and is usually only repaid when the company is "wound up". To differentiate among the liabilities owed to third parties and to the business owners, the later is referred to as the "equity capital" or "capital" of the company.  In adding, undistributed profits are re-invested in corporation assets (such as equipment, stocks and the bank balance). Though these "retained profits" may be obtainable for allocation to shareholders - and may be paid out as dividends at a future date - they are added to the impartiality capital of the business in arriving at the total "equity shareholders' funds".

At whatever time, so, the capital of a business is like to the assets (usually cash) established from the shareholders plus any profits completed by the company through trading that stay undistributed

 

 

Posted Date: 10/15/2012 5:35:47 AM | Location : United States







Related Discussions:- Capital, Assignment Help, Ask Question on Capital, Get Answer, Expert's Help, Capital Discussions

Write discussion on Capital
Your posts are moderated
Related Questions
Explain about the RECORDING PURCHASES Source document for recording a purchase of merchandise is purchase invoice. o An instance of a transaction of purchasing merchandise

Company A has only been in existence for two full years as a public company. Prior to this, it was a segment of large multinational and was spun off as stand-alone, public company.

What is uses of Purchases journal Purchases journal (SPECIAL JOURNAL) Used to record only credit purchases of merchandise-may be only one column which is posted to two accou

The total assets of Capp Co. are $600,000 and its liabilities are equal to two-thirds of its total assets. What is the amount of Capp Co.'s owner's equity?

How to create account for barter transactions? As My Company is providing a service to another company and that company is reimbursing us with his service.

How can price inflation effect a university negatively in the future? Like, what are a few things in the university that will be impacted?

Ask queMary Lapointe, the Chief Financial Officer of your Northern Travel Experience company, has advised that the company will be opening an office in Nunavut this year. The offic

Fund flow deals with transaction within financial year (One year) while Cash flow Statement record only the cash transaction.

Astra Company sells financial calculators and offers instruction on their use. During its first year it expects to sell 3000 calculators at $30 each and offer 5000 hours of instruc

Your report must include at a minimum the following items. 1. Calculate the following ratios based on the 2011 financial statement: * Current ratio * Quick ratio * Total asset