2007-07-10 03:13:28 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
Where to you get the idea that capital is considered as a liability??
The standard accounting formula is Assets = Liabilities + Capital. Expressed another way: Assets - Liabilities = Capital
Capital is neither Asset nor Liability. It's the difference between the two. It can be either a positive or negative balance. If it's negative, you're insolvent.
2007-07-10 03:45:14 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
It's neither, it is equity.
Assets = Liabilities + Equity.
When you contribute capital to a company and record it on your books the entry would be to debit assets for the amount contributed and credit equity. At no point are liabilities affected.
2007-07-10 03:45:40 · answer #2 · answered by stefa1mg 2 · 1⤊ 0⤋
What do you mean?
I don't treat my capital as a liability, its on the left side of the balance sheet with all the other assets. :)
2007-07-10 03:16:25 · answer #3 · answered by Blicka 4 · 0⤊ 3⤋
Capital is assets that are intended for further production.
Where did you get the idea that it is a liability?
2007-07-10 03:18:33 · answer #4 · answered by csucdartgirl 7 · 0⤊ 3⤋