Why does capital usually appear as a liability in a balance sheet?

0 ⤊

Why does capital usually appear as a liability in a balance sheet?

2007-02-13 06:14:15 · 3 answers · asked by Zakir Hossain Khan 1 in Business & Finance ➔ Other - Business & Finance

3 answers

it depends on what kind of capital it is...some capital is a liability...

2007-02-13 06:16:34 · answer #1 · answered by Anonymous · 0⤊ 0⤋

When a company raises capital, it can issue debt (i.e. bonds) or equity (i.e. stock). When investors buy this debt or equity directly from the company, the cash raised becomes an asset of the company. Since the debt or equity issued by the company is 'owed' back to the investors, then the debt or equity issued to raise capital is considered a liability of the company.

2007-02-13 08:05:17 · answer #2 · answered by NHMike 3 · 0⤊ 0⤋

do your own homework next liabilities

2007-02-13 06:17:13 · answer #3 · answered by golferwhoworks 7 · 0⤊ 0⤋