Question

Capital refers to:

• A. Cash invested by outsiders
• B. Assets bought on loan
• C. Cash or assets invested by the owner
• D. Debts owed to suppliers

Answer 1

Answer:

C. Cash or assets invested by the owner

Capital

• Cash or assets invested by the owner into the business is known as capital.

• Capital is an obligation of the business to the owner.

• It is the owner's claim on the assets of the business.

• Capital is also known as owner's equity.

• Capital= Assets- Liabilities