Amount invested by the proprietor in the business should be credit to
Answers
Amount invested by the proprietor into the business from time to time is called Capital.
Investment done by the proprietor in a business should be credited to Goodwill Account.
What is a Goodwill Account and When an investment is made what it is called?
- Goodwill is said to be an Intangible asset that includes brand recognition, intellectual property, etc.
- It is also said to be a capital asset and a real account that can be measured using money.
- When there is an investment by the partner or when there is an asset coming into the business, it is said to be a capital that is posted on the balance sheet on the liabilities side.
CAPITAL ACCOUNT
Amount invested by the proprietor in the business should be credit to PROPRIETOR'S CAPITAL ACCOUNT.
GETTING TO KNOW MORE ABOUT CAPITAL ACCOUNT:
* Capital accounts are held by partners in a partnership or a limited liability partnership (LLP). When a person joins, they are making a financial investment in the company.
* The capital share of the partners in the partnership agreement or LLP operating agreement is used to determine their share of profits and losses.
* A company's equity is divided among shareholders. They invest in stocks and receive dividends based on the number of shares they have. Because of the shares they possess, they have voting rights.