Q:
What Is Owner's Capital?
A:
Quick Answer
In business, owner's capital, or owner's equity, refers to money that owners have invested into the business. In some instances, individuals prefer to finance activities through capital, rather than loans, to avoid facing any financial interest charges.When activities are financed through capital in a business, the profits must be paid to the owners.
Continue Reading
Credit:
Hero Images
Hero Images
Getty Images
Full Answer
The capital portion of the balance sheet is representative of money towards which business owners have a claim. However, this money is not distinctly owed to the owners as would be liabilities owed to banks or creditors. The equity represents the business owner's business investment without the amount of liabilities. The owner's equity may be seen as a source of business assets.
Learn more about AccountingRelated Questions
-
Q:
What Is an Example of a Financial Statement?
A: A balance sheet, income statement, statement of owner's equity and the statement of cash flows are each examples of financial statements. These four types ... Full Answer >Filed Under: -
Q:
What Is the Basic Accounting Formula?
A: The basic accounting formula is an equation that represents the relationship between assets, liabilities and an owner’s equity. This formula forms the buil... Full Answer >Filed Under: -
Q:
What Is Capital in Accounting Terms?
A: Capital in accounting, according to Accountingverse, is the worth of the business after the total liabilities owed by a company is subtracted from that com... Full Answer >Filed Under: -
Q:
What Is the Main Objective for Any Business?
A: Under traditional business theory, the main objective of any business is to make a profit for its owners. Only those business activities that result in the... Full Answer >Filed Under:
