Asked by Meliza Acosta on May 17, 2024
Verified
Capital is
A) an owner's permanent investment in the business.
B) equal to liabilities minus owner's equity.
C) equal to assets minus owner's equity.
D) equal to liabilities plus drawings.
Capital
Financial assets or the financial value of assets, such as cash and goods, used to fund a company or produce more wealth.
Permanent Investment
Investments a company intends to hold for a long duration, typically exceeding one year, for earning dividends or interest income.
Owner's Equity
The total value remaining in a business after all liabilities are subtracted from assets; also known as shareholders' equity.
- Absorb the essentials of accounting, focusing on capital, liabilities, the initial accounting equation, and the recording practices for business activities.
Verified Answer
TD
Travis DavisMay 23, 2024
Final Answer :
A
Explanation :
Capital refers to the amount of money that owners put into a business. It represents the owner's investment and is not derived from liabilities or drawings.
Learning Objectives
- Absorb the essentials of accounting, focusing on capital, liabilities, the initial accounting equation, and the recording practices for business activities.