capital is a assets but its shows in liability side. why?
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Answer Posted / h.r. sreepada bhagi
As per Business Entity Concept, the business unit owes
capital & reserves 9accumulated profits or retained
earnings) to the contributors like Shareholders, Partners or
Proprietors, so it's shown on the Liabilities side of teh
Balance Sheet. This is money is an asset of the contributor
and not of the business unit which has a distinct existence
from it's owners.
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