Question

Why are the rules of debit and credit same for both liabilities and capital?

Answer 1

Answer:

Business entity concept treats business and business owner separately. Capital of the owner is treated as liability to the business because the business has to repay the amount of capital to the owner, in case of closure of the business. ... Thus the rules of debit and credit are same for both liability and capital.✌✌✌✌

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Answer 2

Answer:

Capital of the owner is treated as liability to the business because the business has to repay the amount of capital to the owner, in case of closure of the business.