Question

Capital increases ---------------- increases

Answer 1

Answer:

Revenue.

Explanation:

Capital = Assets - Liabilities

Capital will decrease when we make any expense and increases when we revenue is generated.

Capital will decrease in following cases -

• Paying of cash to creditors

• Drawings

• Paying interests and dividends.

and much more.

Capital will increase in following cases -

• Receiving cash.

• Receiving interests and commissions

• In case of accrual interests.