Question

capital is a liability of the business. explain the statement with the principal applied? 3 msks

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Answer 1

Answer:

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Explanation:

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As per this principle, business is treated as distinct and a separate entity from its owners. ... Thus, in this manner, the capital invested is a liability for a business. Hence, in accounting sense, it means one separate entity (owner) is assumed to be giving money to another distinct entity (business unit).

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