Asked by Meliza Acosta on May 17, 2024

verifed

Verified

Capital is

A) an owner's permanent investment in the business.
B) equal to liabilities minus owner's equity.
C) equal to assets minus owner's equity.
D) equal to liabilities plus drawings.

Capital

Financial assets or the financial value of assets, such as cash and goods, used to fund a company or produce more wealth.

Permanent Investment

Investments a company intends to hold for a long duration, typically exceeding one year, for earning dividends or interest income.

Owner's Equity

The total value remaining in a business after all liabilities are subtracted from assets; also known as shareholders' equity.

  • Absorb the essentials of accounting, focusing on capital, liabilities, the initial accounting equation, and the recording practices for business activities.
verifed

Verified Answer

TD
Travis DavisMay 23, 2024
Final Answer :
A
Explanation :
Capital refers to the amount of money that owners put into a business. It represents the owner's investment and is not derived from liabilities or drawings.