why capital s a liabilities??????
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capital is liability because capital is invested by the owners according to entity concept capital is a one entity and the owneri s another entity. so in this case owner should liable To the business. so that's why capital is liability
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hey Maggie
here is ur answer
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There are many concepts involved around this but allow me to respond in the simplest manner.The classification into assets and liabilities are done purely from the perspective of the business. The business and the owner are considered separate entities to this effect.
This business is considered as an individual who will owe back whatever has been invested on him, generally in form of capital.
Hence, if you were to invest 1 lakh into your hand-loom business this year, the 'business' is now obliged to you, irrespective of the fact whether you own it or someone else owns it. Hence, it becomes a liability for the business to pay that off to you over time through earnings.This is done imagining how much the investor should get back when the business is closed or wrapped up.
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I hope this will help
#Prem✴✌✴✌✴
here is ur answer
▶▶▶▶▶▶▶
There are many concepts involved around this but allow me to respond in the simplest manner.The classification into assets and liabilities are done purely from the perspective of the business. The business and the owner are considered separate entities to this effect.
This business is considered as an individual who will owe back whatever has been invested on him, generally in form of capital.
Hence, if you were to invest 1 lakh into your hand-loom business this year, the 'business' is now obliged to you, irrespective of the fact whether you own it or someone else owns it. Hence, it becomes a liability for the business to pay that off to you over time through earnings.This is done imagining how much the investor should get back when the business is closed or wrapped up.
▶▶▶▶▶▶▶▶▶
I hope this will help
#Prem✴✌✴✌✴
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